Igr

15 YEAR REVIEW REPORT ON THE STATE OF INTERGOVERNMENTAL RELATIONS IN SOUTH AFRICA
The dplg: 13 March 2008
Report on the State of Intergovernmental Relations in SA
TABL E OF CONT ENT S Glossary.. 4 IGR REPORT ON T HE STATE OF INT ERGOVERNM ENTAL RELATIONS IN SOUT H AFRICA...............................................................................5 1. INT RODUCTION.....................................................................................................5 2. THE EV OLUTION OF T HE IGR SYST EM..............................................................7 3. EVOLVING PRACTICES IN INT ERGOV ERNM ENTAL POLICY AND PLANNING.11 3.1 Legislation and Context........................................................................................11 3.2 IGR Processes: Policy and Planning....................................................................14 3.3 Lessons from Practice..........................................................................................15 3.4 Pressure Points....................................................................................................17 4. INT ERGOV ERNMENTAL INST RUMENTS: FORUMS AND BODIES...17 4.1 Legislation and Context........................................................................................18 4.2 Intergovernmental Forums and Bodies: Processes.............................................19 4.3 Lessons from Practice.........................................................................................20 4.4 Pressure Points: IGR Forums and bodies...........................................................24 5. INT ERGOV ERNMENTAL BUDGETING...............................................................25 5.1 Legislation and Context.......................................................................................25 5.2 IGR Processes: budgeting and financial management.......................................277 5.3 Lessons from Practice: Budgeting, Financial Management and Fiscal Relations...................................................................................................29 5.4 Pressure Points: Intergovernmental Budgeting...................................................38 6. INT EGRAT ED SERVICE DELIV ERY IN A DECENT RALISED CONT EXT..39 6.1 Legislation and Context.......................................................................................39 6.2 IGR Processes....................................................................................................41 6.3 Lessons from practice: integrated service delivery.............................................43 6.4 Pressure Points.44 7. CONFLICT RESOL UTION AND DISPUT ES........................................................464 7.1 Legislation and Context........................................................................................44 7.2 IGR Processes.....................................................................................................46 7.3 Lessons from practice..........................................................................................47 7.4 Pressure Points..52 8. EVOLVING PRACTICES IN INT ERGOV ERNM ENTAL MONITORING AND EVALUATION, SUPPORT AND SUPERVISION..................................................52 8.1 Legislation and Context.52 8.2 IGR Processes53
8.3 Lessons from practice58 8.4 Pressure Points...60 9. AREAS FOR IMPROV EMENT...62
APPENDIX A INT ERGOV ERNMENTAL RELATIONS AND COOPERATIVE GOV ERNANCE PERFORMANCE INDICATORS................................................................................66 APPENDIX B BIBLIOGRAPHY AND REFERENCES.....................................................................76
GLOSSARY DBSA DORA DPLG FOSAD GWM&E IDP IG IGR ISRDP LED LGTA MANCO M&E MEC MFMA MinMeC MIG MTEF MTBPS MTSF NCOP NSDP PCC PGDS PFMA PSDP RSC SALGA SDBIP URP Development Bank of South Africa Annual Division of Revenue Act Department of Provincial and Local Government Forum of South African Directors-General Government-w ide Monitoring and Evaluation Municipal Integrated Development Plan Intergovernmental Intergovernmental relations Integrated Sustainable Rural Development Programme Local Economic Development Local Government Transition Act Management Committee of FOSA D Monitoring and Evaluation Member of a provincial Executive Council Municipal Finance Management Act of 2003 Ministerial Forum (of national ministers and provincial MECs) Municipal Infrastructure Grant Medium Ter m Expenditure Framew ork Medium Ter m Budget Policy Statement Medium Ter m Strategic Framew ork National Council of Provinces National Spatial Development Perspective Presidents Coordinating Council Provincial Grow th and Development Strategy Public Finance Management Act of 1999 Provincial Spatial Development Plan Regional Service Council South African Local Government Association Service Delivery and Budget Implementation Plan Urban Renew al Programme
IGR REPORT ON THE STATE OF INTERGOVERNMENTAL RELATIONS IN SOUTH AFRICA 1. INTRODUCTION

The Constitution (1996) states that government is constituted as national, provincial and local spheres of government which are distinctive, interdependent and interrelated (s 40(1)). The distinctive element refers to the autonomy enjoyed by the spheres; that is, the degree to w hich each sphere is the final decision-maker on a particular matter that falls w ithin its area of competence. The creation by the Constitution of this decentralised governance system w hich comprised the three distinct but inter-related spheres of government also gave rise to the need for a systematic system of intergovernmental relations (IGR) to give effect to the principles of cooperative government. To realise these principles, the Intergovernmental Relations Framew ork Act was promulgated on the 15 August 2005. The Act provides for an institutional framew ork for the three spheres of government to facilitate coherent government, effective provision of service, monitoring implementation of policy and legislation, and realisation of developmental goals of government as a w hole. In spelling out the pr inciples of cooperative government and intergovernmental relations, the Constitution binds all spheres of government and organs of state in each sphere of government to three basic principles: 1. A comm on loyalty to the Republic as a whole. This mean that all spheres are committed to the secure the w ell-being of the people of the Republic and, to that end, must provide effective, transparent, accountable and coherent government for the Republic as a w hole. This is the object of cooperative government. 2. The distinctiveness of the spheres should be respected. A sphere must remain w ithin its constitutional mandate, and w hen exercising those pow ers, must not do so in a manner that encroaches on the geographical, functional or institutional integrity of another sphere, except w here specif ically directed otherw ise. 3. The spheres of government must take concrete steps to realize cooperative government by a) Fostering friendly relations; b) Assisting and supporting one another; c) Informing one another of, and consulting one another on, matters of common interest; d) Coordinating their actions and legislation w ith one another; e) Adhering to agreed procedures; and f) Avoiding legal proceedings against one another. In legal terms, the Constitutional Court has, since the enactment of the Constitution in 1996, expanded the jurisprudence surrounding IGR in South Afric a a process that is still continuing. Constitutional Court provisions give clarity on the follow ing: 1. That as far as possible all disputes betw een spheres of government should be resolved at a political level through negotiation, rather than through
adversarial litigation. (Ex parte Chairperson of the Constitutional Assembly: in re Certification of the Republic of South Africa, 1996, 06/09/1996). 2. That Parliament must legislate for structures and institutions to promote and facilitate IGR. (Van Wyk vs Uys No 2002 (5) SA 92, Cape Provincial Division, 11/09/01). 3. That Government in the Republic of South Africa is constituted as national, provincial and local spheres of government w hich are distinctive, interdependent and interrelated. Municipalities established throughout the territory of the Republic constitute the local sphere of government. (Van Wyk vs Uys No) 4. That the Constitution requires the three spheres to co-operate w ith each other in mutual trust and good faithto assist each other and support each other, to consult on matters of national interest and to co-ordinate the actions of the three spheres of government. (Van Wyk vs Uys No) 5. The concurrent and exclusive pow ers of each of the three spheres have been tested before the Constitutional Court, w hich has defended exclusive powers (for instance, of the provinces, in terms of S. 6).(Ex Parte Speaker of the KwaZulu Natal Provincial Legislature: In regarding KwaZulu Natal Amakhosi and Iziphakanyiswa Amendment Bill, 1995), or, more significantly, Ex Parte President of the RSA: In re Constitutionality of the Liquor Bill, 2000 (1) BCLR 1;2000 (1) SA 732). 6. The Constitution makes it clear that all spheres of government and all organs of state are guided by the concept of co-operative government and the principles of Chapter 3 of the Constitution. This means that the system of intergov ernmental relations applies to: 7. the National Parliament and departments and institutions falling w ithin the national sphere of government; a) Provincial Legislatures and departments and institutions falling w ithin the provinc ial sphere of gover nment; b) Municipal Councils, departments and other or gans falling in the local sphere of gover nment (such as munic ipal entities). Exc luded are: a) the courts and judic ial officers; and b) the institutions, established in ter ms of chapter 9 of the Constitution, such as the Independent Electoral Commission ( IEC).
Over the past decade, the three spheres of government have met the challenge of cooperative government by:
Developing IGR institutions at national and provincial level dealing w ith issues of alignment, integration and coherence; Developing IGR systems, processes and procedures, particularly planning processes, in terms of which national, provincial and local governments pursue common objectives; and Engaging in joint w ork and projects to realize integrated service delivery.
Although the Constitution set the tone for cooperative government to be the pervasive spirit for the conduct of effective IGR, it also acknow ledged that conflict may arise betw een spheres as a result of different priorities, aims and objectives. As such it required conflict resolution mechanis ms to be set in place. Now that the legal framew orks have been put in place, the dynamic has shifted to the instruments and the conduct of IGR itself. How ever South Africas intergovernmental system is still in its formative stages, and impact studies on the effect of IGR practice on service delivery w ill evolve as the monitoring and evaluation ( M&E) system develops. To this effect a series of indicators have been developed and are included in this report as Appendix A.
The Report review s the important policy, legislative and programmatic measures that have been implemented by government over this period in order to improve intergovernmental relations, and seeks to assess impact of these measures in terms of the practice of intergovernmental relations. In conclusion the Report w ill examine the areas of tension w hich remain and propose a series of recommendations for possible options for further development/solutions.
2. THE EVOLUTION OF THE IGR SYSTEM

Intergovernmental relations refers to the complex and interdependent relations amongst three spheres of government as w ell as the co-ordination of public policies amongst the national, provincial and local government (The dplg 2007a:2). The ter m intergovernmental relations system is used in this paper to refer to the various components of the governance, administrative and fiscal arrangements operating at the interface betw een national, provincial and local governments. The components w hich contribute to the effective functioning of intergovernmental relations include: 1. Legislation and regulation related to IGR w hic h, inter alia, describe the distribution of pow ers and functions betw een and w ithin spheres of government; 2. IGR structures (such as forums and other bodies); 3. Intergovernmental processes such as planning and budgeting; 4. IGR instruments (such as implementation protocols, guidelines and mechanisms for monitoring, communication, support and supervision); and 5. IG dispute resolution procedures. The development of the nascent IGR system in South Africa may be categor ised into three main phases: 1. Transforming the m acro-organisation of the state and creating an IGR system (1994-2000): This phase centred around the creation of a single public service incorporating the ex-homeland administrations, establishment of the nine provincial governments, cabinet reforms such as the introduction of the cluster system and an end to the transitional phase of local government transformation, culminating in the demarcation of 284 municipalities. The primary focus was initially on the creation of specialist intergovernmental forums and processes, especially in regard to concurrent functions. Where legislation dealt w ith the settlement of intergovernmental disputes, these w ere confined to particular contexts.
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2. Operationalising the IGR System (2001-2004): During this phase the IGR system unfolded rapidly w ith only minimal regulation. To give operational substance to the concept of cooperative government, many non-statutory national and provincial intergovernmental forums emerged (such as the Presidents Coordinating Council, the Forum of South African Directors General, provincial intergovernmental forums). This period also saw increased organised local government engagement in IGR as w ell as increased collaborative joint w ork, programmes and projects across the three spheres. It w as perhaps prudent to go this route, since institutions initially envisaged to be crucial have proven ineffective and been superseded by more effective institutional arrangements. 3. Consolidating the IGR system (2005 to date): The introduction of the Intergovernmental Relations Act of 2005 sketched out a broad, general statutory framew ork for the practice of IGR, regulated IG forums and provided a basic framew ork for the settlement of intergovernmental disputes. With the increased formalisation in the regulatory environment comes a shift of emphasis to intergovernmental instruments facilitating the effective practice of IGR. Table 1 outlines the key milestones in the development of the South African systems on intergovernmental relations. Table 1: Key m ilestones in the evolution of South Africa's IGR system YEAR 1993 IGR MILEST ONE Interim Constitution adopted. Local Government Transition Act (LTGTA) set out a three-phase transition process for local government. The first pre-interim phase commenced. Metropolitan transitional councils, local transitional councils, transitional representative councils, transitional rural and district councils created to replace Apartheid structures. These brought together formerly racially segregated cities and tow ns. First democratic national and provincial government elections. Integration of old provincial administrations and homelands into the nine new ly created provincial governments. Public Service Act of 1994 created a single civil servic e for national and provincial governments. 35 national departments, offices and services, and nine new provincial governments w ere created. Intergovernmental Forum established in August 1994. First local government elections. Establishment of tw o-tier transitional local government arrangements in the cities. The second Interim phase of transition commenced. Final Constitution adopted. MinMecs begin operating as informal intergovernmental forums. Intergovernmental Forum established. The Borrow ing Pow ers of Provincial Government Act 48 of 1996. The Intergovernmental Fiscal Relations Act 97of 1997 formally established the Budget Council and Budget Forum and outlined the process for sharing nationally collected revenues across the three spheres. Organised Local Government Act 52 of 1997 provided for the recognition of national and provincial organisations to represent the various categories of municipalities. Financial and Fiscal Commission Act 99 of 1997 passed. Provincial Review Report on the nine new ly created provinces.
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1994
1995
1996
1997
YEAR 1998
1999
2000
2001 2003
2004
2005
2006
2007
IGR MILEST ONE Introduction of the Medium Term Budget Policy Statement. White Paper on Local Government sketched a vision of developmental local government. Municipal Demarcation Act set forth criteria and procedures for the redefinition of municipal boundaries, creating w all-to-w all local government. Municipal Structures Act 117 of 1889 establishes 3 categories of municipalities (metros, local and district municipalities) and the structures within them. Medium Ter m Expenditure Framew ork introduced. Introduction of the Cabinet Cluster system. Presidents Coordinating Council emerged as the successor to the Intergovernmental Forum. Public Finance Management Act 1 of 1999. Publication of the first annual National Treasury Intergovernmental Fiscal Review. First Annual Division of Revenue Act promulgated. Second local government elections. Final phase of local government transition begins. The number of municipalities is reduced from 843 to 284. The Municipal Systems Act 32 of 2000 outlined the pow ers and functions, planning processes, delegations, performance management and raising of revenue w ithin the municipalities. Municipal Planning and Performance Management Regulations, 2001. Provincial Tax Regulation Process Act 53 of 2001. Gazetting of pow ers and functions betw een category B and C municipalities w ith effect 1 July 2003. The Municipal Finance Management Act 56 of 2003 aimed to modernise local government budgeting and financial management, thereby promoting consultative and cooperative government. Municipal Property Rates Act 6 of 2004 dealt w ith the imposition of property rates. A new budget and reporting format for provincial governments, aligned with both GFS and IPSAS w as introduced, based on a new standard chart of accounts. The Intergovernmental Framew ork Relations Act 13 of 2005 sets out in greater detail the basic legal framew ork for IGR across the three spheres of government and procedures for the settlement of disputes. IGR Practitioners Manual and Toolkit published by DPLG. Third local government elections. Abolition of RSC levies. Municipal Fiscal Pow ers and Functions Act (Act No. 12 of 2007). DPLG commences its policy process on the system of provincial and local government, expected to culminate in a new White Paper on Provinces and a Review Report on Local Government in 2008.
In addition to the formal IGR system components outlined above, there are also other less tangible, but still potent, qualitative factors which condition the practice of IGR (such as politics, trust, leadership, quality of relationships etc). Taken together, both the formal and informal components of the IGR system shape the incentives for good governance and integrated service delivery faced by participants in the IGR system.
The impact of intergovernmental relations practice on service delivery arises from the interplay betw een the formal design elements of the system delineated above, and operational factors which impinge on the implementation of that system (e.g. capacity issues, the political context, community dynamics etc). IGR has both vertical dimensions (i.e. across different spheres of government) and horizontal dimensions (w ithin a particular sphere of government e.g. among provincial governments or municipalities). The effectiveness of the IGR system may be gauged by the extent in w hich it promotes good governance and the translation of development policy intent into actual service delivery outcomes through cooperative government in policy and planning, budgeting, implementation and monitoring and evaluation ( M&E) processes across and w ithin the three spheres of government. IGR is therefore not an end in itself, but adds value only to the extent it supports effective service delivery and good governance across the three spheres of government. This is recognised in the preamble to the IG Framew ork Act of 2005 which acknow ledges that challenges of poverty, inequality and marginalisation of vulnerable groups and communities is best addressed through concerted effort by government in all spheres to w ork together and to integrate as far as possible their actions in the provision of services, the alleviation of poverty and the development of our people and our country. Concerns w ere raised about the effective functioning of the IGR system virtually at its inception: Weaknesses in the structures and practices of intergovernmental relations led to poor coordination w ithin and betw een different departments and spheres of government, creating incapacity to implement national programmes and a consequent failure to delivery basic services (Presidential Review Commission, (PRC) 1998:35). Issues raised by the PRC include the need to establish a balance betw een the natural evolution of intergovernmental relations and the need for prescription; to facilitate information flows betw een and w ithin sectors in all three spheres of government; to improve the w eak intergovernmental relations betw een local government and the other tw o spheres of government; to achieve greater clarity on the obligations of different spheres of government w here there are concurrent responsibilities; and to give greater attention to the lack of capacity in all three spheres of government. The PRC report in February 1998 recommended that a detailed IGR Audit be undertaken. This resulted in a comprehensive Intergovernmental Relations Audit (The dplg, 1999). The IGR audit report findings aimed to assess the strengths and weaknesses of IGR structures at the time, to enhance mechanis ms for intergovernmental cooperation and to mediate intergovernmental tensions effectively. In particular, the IGR Audit noted the failure of provincial governments to establish a cooperative government framew ork for provincial-municipal IGR engagement (The dplg 1999:17). Crucially, the IGR Audit Report noted that reform or regulation in itself might not lead to dramatic improvements in performance as poor IGR coordination is frequently a problem of capacity and management rather than a problem of inappropriate intergovernmental relations. While there w ere is sues in regard to the design of the intergovernmental relations system w hich could be correct by IGR reform or legislation, many of the impediments to effective IGR practice (such as capacity issues) lie outside the intergovernmental system proper. A more recent IGR study commissioned as part of the Ten Year Review by the Presidency focussed mainly on intergovernmental service delivery: successes,
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failures, good practices and blockages. Over the last five years as the IGR system has matured, a number of key trends w ere discerned: 1. An increasing shift in focus from legislative/conceptual/ policy relating to the design of the IGR system to IGR implementation and actual practice. 2. A shift from process to content/substance-based IGR: The early focus of IGR was often on creating structures, procedures and processes, almost seeing IGR as an end in itself. Recently there has been greater emphasis on the actual conduct in support of sectoral servic e delivery priorities. 3. A shift from national and provincial IGR structures and processes to greater local government emphasis and engagement (e.g. the creation and support of municipal IGR forums). 4. Movement from a primarily sectoral focus to integrated development planning for the whole of government, intergovernmental budgeting, joint implementation and other cross-cutting issues.
3. EVOLVING PRACTICES IN INTERGOVERNMENTAL POLICY AND PLANNING 3.1 Legislation and Context
One salient feature of the constitutional dispensation is the injunction that spheres of government exercise their pow ers and perform their functions in a spirit of cooperative government rather than competitive federalism. But typically, policy is set at national level and budgeting and policy implementation is carried out by subnational governments through the assigned functional framew ork as set out in Schedules 4 and 5 of the Constitution. In concurrent functions however, there tends to be considerable overlapping of roles and responsibilities betw een national and provincial responsibilities w ithin a particular sector such as health, transport or education, for example, creating policy tensions betw een the spheres w hich may create a fertile terrain for intergovernmental contestation and disputes. Further more, the complexity of concurrent functions tends to blur lines of accountability. Managing the structural tensions inherent in concurrency and the aspirations to cooperative government lies at the heart of the evolution of South Africas intergovernmental system. These structural tensions need examination for their impact on the alignment of policy and planning. On one hand, progressive realisation of socio-economic rights demands integrated service delivery. On the other hand, sub-national governments (provincial and local) are given a degree of autonomy in crafting their own legislation, policies and budgets w ithin the broad parameters of national legislative and policy framew orks. One approach to contestation in policy is that formulation and implementation may be seen as learning processes. Policy implementation may bring to light more information about the problem w hich is being solved, the strength and w eaknesses of the policy itself, the extent of regional or local variation, its feasibility in terms of the capacity at provincial and local level to implement it or in ter ms of available financial resources. As observed by one Premier: Whatever the nature of the lesson we are learning, w e must be capable of
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feeding it back to policy, so w e can improve the policy for better implementation. This should be simple and straightforward! But in reality w e know it is not so simple and straightforw ard. Because different organisations are responsible for different parts of this process, what should have been a simple process becomes a complex system of inter-governmental relations. Communication becomes formalised, and all of us adopt defensive stances in terms of our organisation, and seek to prove that the problems that emerge are someone else's fault. Never our ow n! That is typical bureaucratic behaviour. In concurrent functions, the National Treasury and the relevant national department introduced uniform statutory formats for their provincial counterparts strategic plans in 2004. These w ere issued in terms of the Public Finance Management Act1 of 1999 and covered sectors such as education, health, roads, etc. Provincial governments have also promulgated their ow n planning legislation in respect of their municipalities. Kw aZulu-Natal enacted a Planning and Development Act 6 of 1998, and proposed a new Bill in 2007 w hich w ould devolve the pow er to make certain planning and development decisions to municipalities. The Western Cape Planning and Development Act 7 of 1999 and the Gauteng Planning and Development Act 3 of 2003 have also been passed. These enactments have contributed to considerable variation in planning approaches across provincial governments. Intergovernmental planning legislation initially focussed mainly on local government. Sections 24 and 26 of the Municipal Systems Act of 2000 required the alignment of Integrated Development Plans to national and provincial development programmes, and outlined the statutory components of IDPs. Since provincial planning is an exclusive provincial competence, no national legislation has yet been enacted. The underlying principle of integrated developing planning across spheres is that it must be the result of a dialogue betw een spheres. National priorities are influenced and shaped by the articulation by communities of their needs through the municipal integrated planning process. Cabinet resolved in July 2001 that national and provincial government should plan and budget around local needs as a matter of principle. In December 2001 the Presidents Coordinating Committee ( PCC) articulated this principle as follows: In a system of state-w ide planning municipal integrated development plans (IDPS) must serve as the basis for aligning the policies, planning and budgeting of all three spheres. IDPs are thus seen as an intergovernmental planning instrument for the whole of government. How ever it has been evidenced that many of the integration challenges w hich have constrained intergovernmental planning refer back to the lack of clarity about the functional competences in Schedules 4 and 5 of the Constitution, as w ell as the assignment of pow ers and functions both across provincial and local spheres and also to the district and local tiers w ithin the local government sphere. An example of lack of clarity w ould be that health services is listed in schedule 4 as a provincial competence, and municipal health services as a local government function w ithout a clear distinction. Similarly Schedule 4A categorises tourism as a provincial matter and Schedule 5B makes local tourism a municipal competence. Some of these definitions have been clarif ied to some extent through legislation. For example, the National Health Act 61 of 2003 defined municipal health services narrow ly to refer to environmental health services such as water quality monitoring, food control, w aste management etc. Administrative definitions of local government pow ers and functions, such as those issued by the Municipal Demarcation Board in
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2003 and 2005, have also help crystallise areas of functional competence ( Municipal Demarcation Board, 2003). Evolution of the role of district councils District councils w ere established during the interim phase of the local government transformation process (1995-2000), arising from the old apartheid Regional Services Councils (RSCs) and Joint Services Boards (JSBs) established in the 1980s. The allocation of functions to them w as not clearly defined by the interim Constitution or the Local Government Transition Acts, leaving their regulation to provincial governments (Municipal Demarcation Board, 2005). The boundaries of district municipalities w ere determined by the Municipal Demarcation Board, culminating in the establishment of 47 district municipalities 1 in December 2000, including new districts w ith little or no capacity at the time. The Municipal Structures Act of 1998 (as amended in 20002) set out a standard division of pow ers which allocated to district municipalities key areas such as water, sanitation, bulk electricity, municipal health services and other functions servicing the entire district (such as fire-fighting, passenger transport, markets, promotion of tourism etc). The remaining functions w ere assigned to local municipalities. This standard division could be changed by the national Minister of Provincial and Local Government w ho could authorise local municipalities to perform district functions such as water, electricity, sanitation and municipal health. The provincial MECs for local government could also authorise local municipalities to perform the remaining district functions depending on w here the capacity to discharge the functions existed. This approach resulted in a protracted decis ion-making process which permitted incremental change ( in line w ith capacity building), and an asymmetrical devolution of pow ers and functions. Current dplg research is analysing the impact on service delivery of the two-tier system of government, as w ell as locating such studies w ithin a broader review of the appropriate location of pow ers and functions for accelerated service delivery and the realisation of the national vision for 2014 through improved intergovernmental predictability and stability. Vision 2014 emphasises new jobs, skills development, economic development, a focus on the poor and eradication of major health problems. More specifically, by 2014 the aim is to:

Reduce unemploy ment by half Reduce poverty by half Provide the skills required by the economy Ensure that all South Africans are able to fully exercis e their constitutional rights and enjoy the full dignity of freedom; and Provide a compassionate government service to the people.
3.2 IGR Processes: Policy and Planning

Central to national and provincial governments approach to coherence in service
1 Up 2
f rom 42 district municipalities in the interim period. Local Government Municipal Structures Amendment Act, 33 of 2000
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delivery and development from the planning perspective is the Medium Ter m Strategic Framew ork (MTSF). This aims at the integration of policy on a horizontal level through the clustering of sectoral line ministries around shared objectives. The Medium Ter m Expenditure Framew ork (MTEF) (and the accompanying Medium Ter m Budget Policy Statement) is used as a tool to encourage cooperation across ministries and departments as w ell as planning in three year cycles. These are supplemented by medium ter m cabinet cluster priorities. Progress is monitored through the Governments Programme of Action. In order to promote aligned policy implementation betw een the spheres, the National Spatial Development Perspective (NSDP) w as drafted in 1998 and has been updated on a regular basis since then, most recently in 2006. In January 2003 it w as approved as an indicative planning tool to promote intergovernmental alignment and harmonisation. The NSDP is not a national plan, but articulates the normative principles and methodologies to underpin investment, infrastructure investment and development planning decisions of all three spheres. The NSDP forms a nexus w ith the provincial PGDS, the IDP and LED planning. What also makes alignment of planning complex is that it occurs betw een spheres as well as between and w ithin the three spheres. The national planning framew ork was introduced as a mechanism to facilitate improved intergovernmental planning: it focuses on: The need for greater cooperation w ithin and across the three spheres of government at a strategic level in planning and implementation; The need for more substantive intergovernmental engagement on strategies and plans; The need to build a greater understanding of the developmental role of local government across all spheres of government; Giving effect to the role of the District or Metro IDP as a platform for a shared understanding and agreement on strategies to unlock development potential and overcome challenges; Greater involvement of national and provincial sector departments in the development of IDPs through involving more senior representatives of sector departments in IDP processes; enhancing the understanding of the IDP process in sector departments; and increasing the involvement of parastatals and government agencies in the IDP processes; and Finding effective mechanis ms for the voice of local government in provincial and national planning processes.
The table below provides a summary of how the various components of the IGR system relate to intergovernmental policy formulation and planning.
Table 3: Intergovernmental policy and planning IGR SYST EM COMPONENT IGR Legislation NATIONAL IGR PROVINCIAL LOCAL Framew ork
Framew ork IGR
Framew ork IGR
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IGR SYST EM COMPONENT
NATIONAL Act of 2005
PROVINCIAL Act of 2005
LOCAL Act of 2005. Municipal Structures Act on pow ers and functions betw een district and local municipalities. Municipal Systems Act on intergovernmental planning (s24) and IDPs (s26). SALGA District IG Forums
IGR Forums/Bodies
Cabinet Cluster PCC FOSAD NCOP
IGR Processes
IGR instruments
Conflict resolution and disputes
Provincial Cluster Min- MECs Premiers Coordinating Forums PGDP Governments Programme of PSDP Standardised Action (PoA) strategic planning NSDP formats for MTSF concurrent departments PGDS Guidelines Implementation Implementation Protocols, Toolkits and Protocols, Toolkits and guidelines guidelines Communication Communication Support Support Court case e.g Liquor licensing dispute
5 year local govt strategic agenda IDP LED Spatial Development Framew ork Implementation Protocols, Toolkits and guidelines Communication Support Systems Act on disputes related to IDPs and pow ers and functions MFMA disputes with public entities
3.3 Lessons from Practice

It should be noted that the development of a w hole of government planning framew ork encompassing all three spheres of government is a relatively new milestone in the evolution of the IGR system. At the inception of the IGR system, national planning had a mainly sectoral focus (mainly in respect of concurrent functional areas). Since then the focus has expanded to local and provincial plans and inter-sphere coordination and alignment.
Some municipalities faced considerable capacity challenges initially in formulating
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their Integrated Development Plans (IDPs) 3. Many municipalities did not have IDPs. Where IDPs existed they tended to be inadequately detailed, insufficiently responsive to community needs, excessively infrastructure focussed and inadequately linked to municipal budgets. In July 2001 Cabinet decided that IDPs should form the basis for aligning policies, plans and budgets in all three spheres. By then most municipalities had completed their IDPs, but most w ere still of poor quality. IDPs remained largely unrelated to budgets and the IDPs of district and local municipalities w ere often misaligned (Portfolio Committee on Provincial and Local Government, 2003). A few provincial governments started developing their Provincial Grow th and Development strategies (PDGS) in 2000-2001. How ever, these were not taken into consideration by national departments or municipalities (Presidency, 2004:20). By 2004, except for the Eastern Cape w hich had finalised its PGDS, other provinces, delayed by the 2004 elections, only had their PGDSs in draft form. A report on IGR and service delivery which was part of the Ten Year review in 2003 observed that in practice there w as little alignment betw een plans in the three spheres of government, resulting in national government priorities not filtering dow n to provincial and local governments, or sub-national input influencing national planning and resource allocation. Some of the reasons included: National and provincial strategic planning, unlike municipal IDP, does not have a spatial dimension. The result is that plans are seen as statements of intent in that they do not have a spatial and geographic impact. Provincial grow th and development strategies either do not exist, are dated, or do not speak to municipal and national plans. National and provincial sector departments have, in general, not engaged municipalities on the content of the latter's IDPs. The challenge w as to create convergence in the parallel planning processes operating in the various spheres of government, and to improve the quality of plans across government. In May 2004, the President, in his State of the Nation Address, called for the harmonisation of the NSDP, PGDS and IDPs. A report on Harmonising and Aligning the NSDP, PGDS and IDPs by the Policy Coordination and Advisory Services Unit in the Presidency (2004) did not propose any new intergovernmental processes, structures or harmonisation mechanisms but concentrated on how the existing instruments, framew orks and procedures could be used more optimally. By 2005 all of the provinces had finalised their PGDSs. Some of them such as Kw aZulu Natal and the Western Cape also had detailed Provincial Spatial Development Plans to support alignment. While quality of IDPs remains a challenge, the adoption rate of IDPs now stands at 98% for the 2006/07 financial year (The dplg 2007/8 Budget Speech). IDP review hearings processes under the auspices of the dplg have recently placed increasing emphasis on w hether provincial and national sector departments align their plans with IDPs. This has also helped to ensure they are more strategic and not just compliance-oriented and to promote alignment. Nevertheless this is still some concern about the extent to w hich IDPs filter upw ards to influence provincial and national planning (IDP Hearings Report 2006).
3
IDPs are required by the Municipal Structures Act of 1998 and the Development Facilitation Act of 1995 and the Municipal Systems Act of 2000.
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The President in his State of Nation Address (February 2006), said that Integration of planning and implementation across the government spheres is one of the prime areas of focus in our programme for the next term of local government, and w e will be guided by the Intergovernmental Relations Framew ork Act. Thereafter the July 2006 Cabinet Lekgotla reconfirmed the need for improving planning, implementation and intergovernmental co-ordination in all the three spheres of government. The Cabinet Lekgotla agreed that the next phase of IDP engagement w ill be managed through Provincial and District IGR Forums. The underlying challenge for government currently is ensuring that IGR structures are able to bring certainty in how the three spheres transact on key developmental priorities of the country as a whole, and how to position government better for local and community focused development.
3.4 Pressure Points

The definitions of schedule 4 and 5 functions: There are a number of concerns relating to the definition of various schedule 4 and 5 functions, and questions relating to w hether the current distribution of powers and functions across the three spheres is optimal. For instance, provinces are expected to regulate municipalities in concurrent functions, yet local government does not appear as a provincial competence. Insufficiently coordinated sectoral impacts on local government: National sector departments initiate policy or programmatic changes w ith municipal impact individually w ithout assessing the cumulative impact of these sectoral policies on the local government sphere as a w hole and on various types of municipalities. Quality of planning w ithin sphere (e.g. PGDS, IDP) needs to be improved. Only then can these become credible platforms for intergovernmental engagement. Insufficient empirical evidence on the degree of alignment betw een NSDP, sectoral policies, PGDS, and IDPs: The need for clear alignment has been a policy intention of the various planning framew orks, but there is little systematic analysis to date on the extent to w hich actual plans are indeed aligned and their impact on spatial dimensions of actual infrastructure investment and development spending decisionmaking.
4. INT ERGOV ERNMENTAL INST RUMENTS: FORUMS AND BODIES
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4.1 Legislation and Context

A number of executive intergovernmental instruments, most of w hich are nonstatutory, have developed, at national and provincial level. The Presidents Coordinating Council ( PCC) comprises the President, the Minister of Provincial and Local Government, and provincial premiers. Organised local government has also attended on invitation. The PCC is the senior consultative body that deals with cross-sectoral issues and presents an opportunity for provinces to impact on national policy and to ensure the coordinated and integrated implementation of national policies and programmes at provincial level. The PCC is enabled to explore the impact of national policies on other spheres and for monitoring service delivery performance w ith a view to taking corrective action w here necessary (The dplg, 2007) Since 1996 informal IGR forums have been formed along sectoral lines consisting of national ministers and their provincial counterparts in MinMECs. Only the financial and educational sectors have formalized their structure into statutory bodies. Where local government interests have been involved, the South African Local Government Association (SALGA) has represented organised local government. MinMECs performed multi-purpose functions:

They have been used for information sharing and consultation. They have been used by supervising spheres to consult w ith supervised spheres over supervision issues. As a forum of cooperative government, they have been utilized to align policies and coordinate actions.
Tracking the political IGR structures are the technical committees of bureaucrats, the most important of these being the Forum of South African Directors General (FOSA D), consisting of the national and provincial directors-general. FOSAD is chaired by the Director General in the Presidency, and is organised along the lines of Cabinet Committee Clusters. The chairpersons of the FOSAD Clusters together w ith the Directors General in the Presidency, the National Treasury, Public Service Commission, the South African Management Development Institute and a representative of the Provincial Directors General, constitute the Management Committee of FOSAD (Manco). Coordinating ministers are appointed in order to facilitate co-ordination betw een the Cabinet Committees and Directors Generals Clusters and to ensure oversight of the work of Directors Generals Clusters. At national level the Cabinet cluster system clusters the w ork of ministries and departments in related functional areas. This system, introduced in 1999/2000 also provides for provincial participation by including provincial directors-general as members of clusters. In some provinces the cluster system has also been replicated. The IGR Framew ork Act revitalised provincialmunicipal IGR by prompting the creation of new provincial IGR forums called Premiers Coordinating Forums w hich must report at least annually to the PCC. The Act stipulated that all statutory intergovernmental bodies not established in ter ms of the IGR Framew ork Act must comply, w ithin one year of the Act coming into operation, w ith the Acts framew ork for the internal procedures, unless their establishing legislation specifically regulates the rules of such bodies. Section 36 of the IGR Framew ork Act requires that provincial policies and legislation take into account both national priorities as w ell as local interests.
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Since promulgation of the 2005 Act, fifteen national sector departments w ith concurrent competencies have established Intergovernmental Forums (MinMecs), All Provincial Governments have established their Premier Co-ordinating Forums and all of the 46 District IGR Forums. Some of these structures are established by sector legislations, and others w ere established before the promulgation of the IGR Act. The Act envisages that district IG Forums be used as a vehicle for consultation on the financial and institutional impact of proposed provincial policies and legislation. The key elements that require further strengthening is clarity on the strategic agenda for inter-sphere engagement and improvement of the functionality of these IGR structures. The manner of local government participation varies. First, local government politicians are represented through the provincial associations of local government on the basis that they represent the voice of municipalities in intergovernmental forums. Second, municipalities are directly represented through their respective mayors. District-Mayoral Forums, or the DIGFs, constitute themselves as an entry point for any inter-sphere and sectoral support to the District Municipalities. District Mayors assume more responsibility in ensuring that there is a district-w ide development vision informed by IDPs of Local Municipalities. District Mayors utilise the IGR Forums monitor national and provincial sector commitments to supporting their credible IDPs, and lastly, District Mayors to ensure rationalisation of co-ordinative structures at district level. On issues of service delivery an IGR forum representative of the implementing authorities provincial departments and municipalities w ould be the best structure to ensure that decisions taken collectively are actually implemented in practice. A third approach is a combination of the previous tw o, resulting in the direct representation of municipalities w ith organised local government (SALGA) as an additional member. The IGR forums are non-statutory, established in ter ms of a Memorandum of Understanding or a protocol.
4.2 Intergovernmental Forums and Bodies: Processes

Currently all provinces have established Premier s Coordinating Forums (DPLG 2007/8 Budget Speech). Each Provincial Coordinating Forum adopts its ow n internal rules. While attendance can be extended beyond w hat is prescribed in the IGR Framew ork Act, the forum should remain high level and focussed. Ideally, municipalities should participate in agenda setting for these forums lest the PCF becomes an array of provincial presentations to the municipalities(The dplg, 2007). A more recent study has indicated that the new Premiers Coordinating Forums comply w ith the IGR Framew ork Act of 2005 in terms of composition, but have generally gone beyond this to ensure extensive representation both from provincial government and municipalities. The size of provincial intergovernmental forums has increased markedly: In Mpumalanga, membership has more than doubled. The largest provincial structures are, how ever, in Limpopo and North West w here more than 100 and 70 officials and politicians attend meetings. These specific intergovernmental structures are an all-in forum that are much closer to a conference style
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gathering rather than to a focused IGR forum contemplated by the Act. How ever in 2006, only a few provincial intergovernmental structures had adopted protocols for internal procedures as required by the IGR Framew ork Act of 2005. How ever, the operation of Premiers Coordinating Forums has improved in ter ms of meeting and engaging. The meetings of some of the provincial forums are not, how ever, held at defined intervals. Developmental goals in the IDPs and Provincial Grow th and Development Strategy (PGDS) have become a dominant feature in the agenda of most Premiers Coordinating Forums. Some provincial forums (i.e. the Provincial IG forums in Limpopo, the NWPCC in North West and the PCFs in Eastern Cape and Kw aZuluNatal) have introduced procedures w ith regard to the adoption of resolutions and their implementation. The degree of success in engaging municipalities in agenda setting has been varied. It has to some extent been achieved in the North West, but in the Eastern Cape, despite requests from the Premiers Coodinating Forum, proposed agenda items from SALGA Eastern Cape and national departments represented in the province have not been forthcoming. All the Premiers Coordinating Forums have technical support committees since this is required by the IGR Framew ork Act. Unlike the provincial IG structures before the IGR Framew ork Act, which encompassed members from both the executive and legislature and even from traditional leadership, the new Premiers Coordinating Forums are exclusively executive structures. Elected politicians and civil servants continue to sit together in provincial intergovernmental forums, blurring the distinction betw een political and technical forums. While the IGRF Act provided for metros and district municipalities to be represented on Premier s Coordinating Forums, most provinces include local municipalities as members as well. District intergovernmental forums w hich are supposed to feed up inputs from the local municipalities may not, how ever be functioning effectively and there may be a communication breakdow n re objectives and resolutions taken. Where the local municipality may be dominant and more capacitated relative to the district, this may cause a breakdow n in relations. Dplg studies have also demonstrated that provincial Intergovernmental forums have gone beyond information sharing, to engagement w ith development issues in municipal IDPs. How ever, there is still insufficient focus on the strategic agenda the planning, implementation and monitoring of development. Agendas are often too broad, including non- IGR related issues. Although it is too early to pronounce on the impact of institutionalising IGR forums, there have already been some benefits. For example, despite the dispute betw een the City of Cape Tow n and the Western Cape Provincial Government, the PremierMayors Forum continues to function.
4.3 Lessons from Practice District Forums The District IGR Forum is intended to be exclusively a political structure, but there has been examples of a combination of elected and appointed officials, as in Limpopo and Mpumalanga. Other IG structures, such as the North West Forum, have invited municipal managers as technical support. Membership of some forums may be seen as too broad, w ithout adequate distinction draw n betw een members and invitees, and blurred boundaries betw een the district IG Forum itself and support
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bodies. It is too early to gauge the impact of the IGRF Act on district level service delivery, but District Intergovernmental Forums surveyed in recent studies have varying performance levels. One study found that many did not focus on the integration of IDPs. The key issues w ere neglected in most DIFs. For example, not many forums discussed the integration of IDPs, matters arising from the Premier s Intergovernmental Forums or the integration of local municipalities policies and projects in a district (horizontal alignment). Alternatively, there has been some evidence that the functioning of the district intergovernmental forums has contributed to improved planning (e.g. in Sekhukhune and Cape Winelands), and in deepening the understanding of strategic processes and in enhancing communication. Thus the important insight w hich emerges overall is that broader plans and development framew orks are a critical pre-condition to effective functioning of district intergovernmental forums. Standing items relating to these planning and development framew orks provide focus to the forums through guiding the agenda. Without these planning and developmental framew orks, intergovernmental engagement could degenerate into process and procedure rather than substance/content based IGR. In the District IGR Forum Review, commissioned by the dplg in 2007, it w as noted that rules for internal procedures have now all been adopted, and that attendance is generally good. Attendance at the technical forums has been less consistent, due to reasons such as time pressures of officials. The Review noted that all of the district IG Forums have dispute resolution procedures, though none have actually used them to date. One problem experienced was that the representatives of local municipalities w ere often not mandated to take decisions, resulting in delays w hile they reverted to their executives. In 2006 research described and evaluated the status quo of provincial and local government relations and district and local municipality intergovernmental relations structures prior to the IGRF Act. Except for Limpopo (in 2006), all provinces had set up some form of intergovernmental structures. Typically, they had a very broad, inclusive structures consisting of the Premier, the provincial cabinet, organised local government, mayors and municipal managers of all municipalities w ithin the province. This w as supplemented by a smaller, more focussed structure commonly referred to as the Premiers Coordinating Forum w hich comprised the Premier (w ithout including the provincial cabinet) and the mayors of all municipalities. While the former tended to deal w ith broader policy issues, the latter dealt w ith the coordination of service delivery. Membership w as typically draw n from both the executive and the legislature, as w ell as traditional leadership and institutions such as parastatals w hich fall outside both spheres of government. In some case municipalities are represented by organised local government (e.g. in the Free State and the North West), in others the municipalities are directly represented by their mayors (e.g. Gauteng). Whether provincial and municipal members of these IGR forums have equal status w as seen as doubtful w here provinces dominate as chairperson (rather than rotation) and in administrative positions.
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The effectiveness of these provincial IG forums w as then reported as extremely variable. Some of them had never met beyond their inaugural meetings (e.g. the Eastern Cape). In other cases where meetings w ere convened, attendance w as reportedly low due to lack of commitment by the officials involved in these processes (e.g. the North West and Free State). Even w here a number of bodies had been established, they w ere not operating w ell, such as in the Free State. Other research indicated that some provinces had taken the lead in establishing district-municipal forums (e.g. Western Cape, and Kw aZulu-Natal, w here it was necessary to promote cooperation across IFP and ANC party lines). Despite good practice examples such as Cacadu Intergovernmental Forum, many district IG forums existed in name only. Many districts without established forums have used informal communication and meetings betw een district and local officials to align their policy, planning and implementation, in some cases quite effectively. How ever, the research observed that the establishment of intergovernmental forums is a necessary, but not a sufficient condition, for effective district-local relations: More important factors include the frequency and detail of communication betw een municipalities and the intangible element of trust. Unless a municipality believes its district/local partner is truly committed to helping it achieve its goals, even the most rigidly legislated forums w ill do little to improve their effective cooperation. The follow ing case studies depict opportunities for IG Forums and senior public servants to coordinate required outcomes Mini case study 1: Funding no fee schools The newspaper article reflected below indicates that agreements taken at MinMEC level often do not translate into provincial action and financing. In this case, the national no fee schools policy exempted poor schools from charging school fees. Not all provincial departments provided financing to schools in order to compensate for loss of school fee income as agreed. BILLIONS TO UPGRADE UNIVERSITIES AND SCHOOLS CA PE TIMES 13.2.2008 Pandor also has warned that "we can't have schools held hostage to the inefficiency of education administrators". . She said even though the department w anted to increase no-fees school to 60% as per the ANC conference's resolution this w as hampered by some provinces' incompetence. "One of the things that has really worried me is that I have said to all the MECs: 'ensure that those schools even though they (have) got a very low income (base) because the parents are obviously poor, make sure there is a cash flow so they can buy chalk, buy a duster, even buy exercise books if the stationery is not delivered'. "Sadly, that directive has not been follow ed by all the provinces, and therefore many schools have found themselves in difficulties because the little cash flow they had through school fees is no longer coming through," she said yesterday. She said if schools did not get money from provinces, "I don't have any pow er to intervene. "My department must be able, if necessary, to retrieve money from provinces and direct it from the national department to schools that haven't received their funding," she said. Pandor said this w as why she wanted more pow ers to deal w ith incompetent provinces.
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"We don't have any lever at the national level to hold provinces to account on preapproved programmes. There is a need for rethought of the arrangements, but devolution of pow ers is important, I w ouldn't support a centralised system," she said.
Mini case study 2: Gauteng provincial-m unicipal relations In Gauteng, there have been several stumbling blocks limiting effective integrated planning and intergovernmental relations. Some of these include: Uncoordinated actions betw een province and municipalities, betw een provincial sector departments operating in the same municipality, as well as amongst neighbouring municipalities themselves; A lack of common understanding betw een provinces and municipalities regarding problems and issues faced at the respective levels; A lack of clarity regarding the requirements of the respective provincial sector departments, the level of detail required, as w ell as the relevance of that specific requirement for the respective municipal IDPs; Limited strategic guidance on key provincial directions to municipalities; Difficulty for municipalities in gaining access to and information on provincial plans, policies, budget allocations and strategies; Different information bases and standards used in planning has a negative impact on the ability of municipalities to draw up realistic and sensible IDPs; Different approaches to IDP by respective municipalities and a perceived feeling of mutual mistrust and a lack of empathy on local specific circumstances; Capacity and competency gaps at municipal and provincial level; IDP assessment through checklists of provincial requirements that did not necessarily correspond w ith local priorities nor the spirit of IDP; and A lack of formalised structures or processes to ensure a meaningful provincial engagement in the preparation of IDPs (Gauteng Provincial Government, 2004). The IDP review process raised the follow ing challenges for co-operative governance in Gauteng Pr ovince: a perpetuation of previous hierarchical relations betw een spheres; insufficient sharing of information; an absence of a focus on specific or crosscutting issues; a lack of institutional and human capacity; erratic and unfocused participation in coordination structures; and inadequate enforcement and performance management. In addition, the existing tools and instruments of government are not used and utilised as intended, functions are not performed as intended and there is a general absence if a shared spatial area of focus in terms of development. It is therefore proposed that greater emphasis be placed on engagement and alignment in an effort to ensure co-operative governance, which would ultimately result in sustainable development (Gauteng Provincial Government, 2004) The importance of forum consultation around intergovernmental issues both w ithin government and w ith broader civil society (in areas which would affect them) w as underscored by the recent Matatiele Constitutional Court case.
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Mini case study 3: Matatiele Municipality and Others v President of the Republic of South Africa and Others The Constitution Tw elfth Amendment Act of 2005 gave effect to a 2002 Presidents Coordinating Council decision that cross-border municipalities be abolished in the interests of improved service delivery. The constitutional validity of this legislation w as challenged in the Constitutional Court in the case of Matatiele Municipality and Others v President of the Republic of South Africa and Others 2006 (5) BCLR 622 (CC). Matatiele Municipality challenged its proposed transfer from Kw aZulu-Natal to the Eastern Cape province. On the 18 August 2006, the Constitutional Court ruled that the provisions transferring Matatiele w ere invalid. The Kw aZulu-Natal provincial Legislature had failed to facilitate public involvement w hen considering these parts of the Bill, and gave them 18 months to correct this procedural defect. In 2007, the Cross-boundary Municipalities Laws Repeal and Related Matters Act re-affirmed arrangements for the elimination of cross border municipalities.
4.4 Pressure Points: IGR Forums and bodies

1. The role of secondary cities or aspirant metros in districts is a source of districtlocal tension 4. Where districts have lacked the capacity to provide effective leadership, more capacitated local municipalities have ignored district forums. 2. The composition of the PCC is reflective of the low level of representation of local government in the IGR system. Of the 16 members, 9 are the premiers w ho can speak on behalf of their ow n organisations. SALGA, on the other hand, has only a single member, but has to represent the interests of 283 w idely varying municipalities. This phenomenon recurs in the MinMECs, extended Cabinet, FOSAD and other intergovernmental bodies. 3. Decision-m aking in IGR forums: there remains confusion over whether recommendations of MinMECs are binding. There is uncertainty about the ground rules that results in inconsistent practices, unreasonable expectations and unconstitutional conduct. A practice has developed w here the decisions of a MinMEC are taken to be binding decisions on the executive of provinces. MECS do not alw ays table important MinMEC decisions to their executive for approval (or even noting). Not only does it undercut the executive authority of the Executive Council, but it also creates confusion about w hether a policy has really been adopted by a government. Moreover it opens national government to continuous claims of unfunded mandates. There are few mechanisms at provincial level to follow up MinMEC recommendations and inadequate consultation w ith provincial Executive Councils. 4. There is still overly sectoral rather than intersectoral integrated development planning. While some MinMECs such as the Local Government MinMEC and the Budget Council are seen as effective, research indicates that others are perceived as less so. Joint local government MinMECs may need to be held (on the lines of the 10x10 model 5) to provide for a clearing house for all national policy affecting local government to be created at a technical level that can support the joint MinMECs on local government. 5. The absence of clear reporting lines betw een MinMECs and the PCC, and betw een a provincial IG Forums and MinMECS can under mine effective coordination.
4 An example of the disparity in capacity would be the modest district municipality of Motheo vis--vis Manguang Local Municipality. 5 In a 10x10 the relev ant concurrent function national department and its nine prov incial departments meet with the National Treasury and the nine provincial Treasuries.
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This w as legislatively addressed by the IGR Framew ork Act (section 12) which dealt with referrals to MinMECs by the PCC and MinMEC reporting to the PCC, and needs to be monitored for effectiveness. 6. One risk highlighted w as having elected officials (such as mayors) and appointed officials (such as municipal managers) in the same forum, w hich could lead to political interference in, or the politicisation of, implementation issues. Municipal managers may be pressured to cater to short term political needs, and cooperation with managers from municipalities controlled by other parties may be undermined. Instead of the constitutional presumption of equality among municipalities, district municipalities tend to be dominant. Alternatively, tensions have arisen w here the local municipalities are more capacitated and have questioned the districts leadership ability. Linkages betw een district forums and other provincial and national IGR structures tended to be tenuous. 7. Research in 2005 pointed out that district forums tended to be more effective the greater the proportion of executive mayors in attendance, since executive mayors have more pow er than their ordinary counterparts. Since the IGR Framew ork Act has limited the attendance of forums to mayors (executive and non-executive), there is no means to resolve the limitation of non-executive mayors w ithout changing the entire council structures of many district and local municipalities.
5. INTERGOVERNMENTAL BUDGETING
5.1 Legislation and context
Intergovernmental Fiscal Relations (IGFR) concerns the structure of public finance in a state w ith more than one level or sphere of government. This includes the allocation of expenditure responsibilities and authority to tax amongst the spheres of government, how the system of intergovernmental grants w orks to alleviate any shortfall betw een taxes raised and expenditures required, how borrowing and regulatory functions are distributed among spheres of government, and finally the institutional mechanis ms for coordination, monitoring, support, supervision and intervention. Decisions in each of these areas shape the configuration of the intergovernmental fiscal system, its evolution and its functioning. The stability and predictability of an intergovernmental fiscal system is inextricably linked to the stability of the overall fiscal framew ork in which it operates. The establishment of the South African Revenue Services which expanded the countrys fiscal base and reaped considerable efficiencies in collection, created a stable backdrop for the evolution of the intergovernmental system. Instability at national level w ould have negated attempts to create certainty at sub-national level, for example by gazetting indicative allocations three years in advance over the MTEF period. The budget reforms precipitated by sections 215 and 216 of the Constitution w ere critical in supporting the evolution of the intergovernmental system by creating transparency, coordination and predictability of financial arrangements w ithin, and betw een, the three spheres of government. A Medium Ter m Budget Policy Statement was introduced in December 1997. It provides governments broad fiscal intentions for the follow ing years budget, and improved debt and cash management strategies. There w as also a move tow ards budgeting over a three year horizon in the first Medium Ter m Expenditure Framew ork in March .The link betw een budget reform and the roll-out of the intergovernmental fiscal system w as clearly articulated:
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The introduction of three year budgets and their consolidation into resource envelopes is an important step in the evolution of the institutional framew ork for intergovernmental policy making and budget planning. The intergovernmental forums of the spending departments w ill, for the first time, have expenditure projections w ithin w hich to develop and refine the nor ms and standards for service delivery (Department of Finance, 1997b:5)
Legislation and budgeting and financial m anagement There is a solid basis for intergovernmental budgeting and financial management. The Public Finance Management Act of 1999 (and its associated regulations) deals with the modernisation of financial management of national and provincial government departments and public entities. The Municipal Finance Management Act of 2003, the Municipal Property Rates Act of 2004 and the Municipal Fiscal Pow ers and Functions Act of 2007 (and their associated regulations) perform a similar function w ithin the local sphere. Both of them, how ever, deal to some extent w ith fiscal and financial interfaces w ith other spheres. Intergovernmental fiscal relations proper is regulated by the Intergovernmental Fiscal Relations Act of 1999, and the annual Division of Revenue Act which gives effect to the revenue sharing provisions in the Constitution. A provision on the financial implications of assignments and prevention of unfunded mandates is outlined in section 35 of the PFMA. Draft legislation w hich assigns an additional pow er, function or any other obligation, on a provincial government, must be accompanied by a memorandum giving a projection of the financial implications of that function, pow er or obligation to the province. This memorandum must be introduced in Par liament w ith the proposed legislation. Sections 9 and 10 of the Municipal Systems Act contains similar provisions requiring the financial and human resource implications of any assignment by an Act of Par liament or a provincial Act be spelt out over the medium ter m, including how additional expenditure by municipalities w ould be funded. Similar arrangements apply to executive assignment or agreement. Section 10A requires national or provincial government, or any other organ of state, contemplating assignment to provide the requisite funding if duty falls outside the functional areas listed in Part B of Schedule 4 or Part B of Schedule 5 to the Constitution or is not incidental to any of those functional areas. Section 100 and section 139 (5) relate to financial interventions by national government in regard to provinces and municipalities respectively. These are discussed in greater detail in Section 7 of this paper. The tw o major intergovernmental fiscal institutions are the Budget Council (the MinMEC for finance) and the Budget Forum, both established in ter ms of the Intergovernmental Fiscal Relations Act of 1999, among the first IGR bodies to be established by statute. The Budget Council has been regarded by observers as one of the more focussed and effective intergovernmental forums. Also important are joint meetings of other sectoral MinMECs w ith the Budget Council (the so called four-byfours (4x4s)) to assess the financial implications of sectoral policy. The Public Finance Management Act 1 of 1999 ( PFMA) gave effect to section 216 of the Constitution, and began the move from a highly centralised input-oriented expenditure control system tow ards a more performance oriented system that w ould allow managers to manage but hold them accountable. The PFMA also formally established the National Treasury, as envisaged by the Constitution, amalgamating the former departments of Finance and State Expenditure. In 2003, the Municipal
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Finance Management Act was passed to extend budget reforms to municipalities. In 2004 a new budget and reporting format for provincial governments, aligned w ith both GFS and IPSAS, w as introduced, based on a new standard chart of accounts.
5.2 IGR Processes: budgeting and financial management

One of the main shortcomings of the early MTEF incarnations w as that there was inadequate integration betw een planned and actual service delivery outputs and the MTEF budgets and actual expenditure outcomes. the introduction of the Medium Ter m Expenditure Framew ork (MTEF) is a start towards a better management system. How ever, the most noticeable shortcoming of the current system is that there is no link betw een expenditure and service delivery. (The dplg, 1999:5). Over time, the South African budget system has moved closer to a performance budgeting approach w hich aims to link budgeted funds to service delivery outputs. Since 2004, uniform strategic plans, budget structures and a core set of performance measures and indicators over a three year period has been introduced for provincial concurrent functions. This facilitates cross-province bench-marking over the MTEF period and budgetary alignment. National government departments have also recently, in Estimates of National Expenditure 2007, developed trendable and quantifiable output measures and indicators over the MTEF period. Much w ork remains, how ever, to tighten the articulation betw een planning and budgeting w ithin individual organs of stage (e.g. in relation to departmental, sectoral and provincial strategic plans and IDPs for municipalities). There is no doubt that the practice of intergovernmental fiscal relations in South Africa has overcome many of its initial teething problems and certain areas provide a model of good practice, e.g. transparent, formula-based, equitable share grants for which indicative allocations are gazetted in advance for each province and municipality in the division of revenue bill, and published in the Medium Ter m Budget Policy Statement 5 months before the division of revenue is enacted. Certainly, teething problems relating to misunderstanding of the system, timing issues, changes as a result of evolving framew orks etc have, by and large, been resolved. Others relating, for example, to capacity, remain. But the most concerning issues relate to the structural tensions derived from the concurrent assignment of functions embedded in the constitution itself. These have been apparent since the embryonic stages of the system itself and still persist. These problems include:
1. The disjuncture between policy objectives, plans, budgets and implementation: Sometimes policies agreed upon nationally at sector level may not be funded or funded adequately by sub-national governments. As a result of this fragmentation, these policies are not effectively implemented and the intended policy outcomes not realised (see Mini case study 1: Funding no fee schools on page 22). 2. Overlapping nature of concurrent functions obscures lines of accountability of spheres or office bearers: Unrealistic national policies which do not take the operational context and human resources, capacity and other constraints that sub-national governments face may under mine
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implementation. If policy is poorly designed, then clear ly the implementation agent is not responsible. Conversely, well designed policy may be undermined by poor implementation and decisions at provincial or local level which lead to inadequate funding. Under these circumstances, the policymakers are not at fault. The overlapping nature of concurrent functions blur lines of accountability (National Treasury, 2007). 3. Joint responsibility for concurrent function planning and implementation, but single point budget authority and accountability: Also, w hile concurrency of functions is often predicated on the premise of joint planning and implementation of project, budget accountability is singlefocussed and organisation specific. Joint w ork thus requires finding new and efficient w ays of getting entities to w ork together w hile retaining single-point accountability for public expenditure (Lay man, 2003:26). Furthermore, w hile there are consequences follow ing from non-execution of budgets or noncompliance w ith financial regulation, there are none in respect of strategic and long ter m development plans. This creates incentives for organs of state to promise in plans w hat they may not be able to afford in their budgets. Budget accountability has, due to limitations on monitoring and evaluation system, focused to date mainly on outputs rather than impact. Some of the symptoms of the misalignment betw een policy, implementation and resource allocation seriously impact the quality of service delivery and its extension to previously under-serviced communities is compromised. On the one hand, provincial governments and municipalities often complain about unfunded mandates where sub-national governments are assigned additional service delivery responsibilities w ithout the commensurate funding. On the other hand national government complain about budget gaming, w here provincial governments engage in opportunistic behaviours in order to secure additional funding. An example of this w ould be w here a provincial government diverts funds from basic service delivery in order to serve their own priorities (e.g. prestigious infrastructure projects, investment or economic development funds) and then reverts to national for additional funding to meet essential service delivery obligations. Another manifestation is fiscal dumping in order to conceal underspending. This refers to the practice of government departments transferring unspent funds to lower spheres of government, external service-delivery contractors or public entities w ithout due consideration for their capacity to spend these funds effectively. While some of these issues may be attributed to poor intergovernmental relations practice per se, many are due to structural tensions in the Constitution and other important factors outside the IGR system such as capacity and skills shortages, political dynamics etc. The table below gives a brief summary of the components of the IGR system as they relate to intergovernmental budgeting.
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Table 4: Intergovernmental budgeting IGR SYST EM COMPONENT IGR Legislation NATIONAL Intergovernmental Fiscal Relations Act of 1999 (IGFRA) Division of Revenue Act (DoRA) PFMA PROVINCIAL PFMA DORA PFMA Interventions LOCAL IGFRA DORA MFMA Municipal Fiscal Pow ers and Functions Act Property Rates Act Financial interventions Budget Forum FFC MTREF process and SDBIP MIG and other conditional grants Financial sanctions Monthly financial reporting MFMA disputes with public entities Court cases e.g Utukhela
IGR Forums/Bodies IGR Processes IGR instruments
Cabinet NCOP FFC MTEF process MIG and other conditional grants
Budget Council FFC Provincial EXCOs MTEF process Conditional grants Financial sanctions Monthly financial reporting
Conflict resolution and disputes
While the intergovernmental budget process has worked fairly well in recent years, it has been suggested by some role-players that the role of coordinating departments at the centre of government (such as the Presidency, DPSA and DPLG) be clarified. There is a real danger of policy making through the budget. It is policy priorities which should drive the budget and not the other w ay around. There are signs that the latter is happening. There is a need for a mechanism that systematically links the policy-making process to the budgetary process. While structures, such as Cabinet Committees, Cabinet Clusters, the Forum of South African DirectorsGeneral (FOSA D), and the Cabinet Office and the Policy Unit w ithin the Presidency, exist, their role is not well defined in Treasury and other budgeting processes There have also been calls for greater local government engagement. SALGA is tasked w ith the daunting mandate to represent 283 municipalities w ith w idely varying fiscal capacities and divergent interests. It has been noted that w hile National Treasury consults SALGA regarding the local government equitable share, this consultation appears to be more procedural than substantive.
5.3 Lessons from Practice: Budgeting, Financial Management and Fiscal Relations
The intergovernmental budget process has to accommodate the financial years of national and provincial government and of municipalities While there w ere problems initially w ith harmonising these different budget cycles these have abated in recent years partially as a result of provincial and local intergovernmental transfers being
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gazetted three years in advance and five year planning horizons at provincial and municipal level. At present there are two diametrically opposing philosophies on provincial fiscal pow ers. The one is that provincial governments have fiscal pow ers which are too limited. The other view is that their fiscal discretion is too extensive and needs to be curtailed to ensure the achievement of national policy objectives. One view contends that provincial ow n revenues have alw ays been very marginal, that conditional grants have tended to increase over time, and that the equitable share has show n a declining tendency (as a proportion of the vertical division of nationally collected resources) (See Table 5 below). There are also rigidities in provincial personnel budgets as a result of central bargaining. Thus it may be argued that provincial discretion over provincial expenditure has concomitantly evinced a tendency to decline over time. Table 5: Actual & budgeted revenues of provincial government (R m ) 2004/0 5 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 138,51 Total provincial grants 1 154,368 178,871 205,224 238,076 268,158 293,640 120,88 135,29 150,75 172,86 199,37 225,46 246,30 Equitable share 5 2 3 2 7 6 6 Conditional grants 17,627 19,076 28,118 32,362 38,699 42,692 47,334 Provincial ow n 6,239 7,378 8,003 8,822 8,921 9,394 9,911 receipts Total provincial 144,75 161,746 186,874 214,046 246,997 277,552 303,551 revenue 0 Equitable share % 84% 84% 81% 81% 81% 81% 81% Conditional grants % 12% 12% 15% 15% 16% 15% 16% Prov. Ow n receipts % 4% 5% 4% 4% 4% 3% 3% Source: National Treasury (2008) R million The economic rationale for fiscal decentralisation to provincial and local governments rests on the allocative efficiency gains where sub-national governments tailor their programme delivery and service delivery mix to regional and local priorities and economic circumstances. One observer believes that without sufficient fiscal discretion, a key motivation for fiscal decentralisation is negated: Unconditional transfers to sub-national governments w ithout significant tax pow ers are essentially to employ the sub-national governments as spending agencies. In such a system, ensuring horizontal equity requires that each of the provinces should receive the transfer equivalent to enable it to provide identical real value of public services. In such cases, variation in the unit cost of public services is the only source of inequity. Thus, the transfer system should be designed to take into account all cost differences beyond the control of provinces. How ever, in a system w ith little tax pow ers to provinces, the ability of the provinces to vary the standards of public services or their composition in accordance with the preferences of residents would be limited and thus, the system ignores a major advantage of fiscal decentralization. This view purports that there is little fiscal or financial advantage to having provincial governments, w hich are only nominally required to govern their province. The argument is that a provincial government should have sufficient fiscal authority in its
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budget decision- making to per mit it to be responsive to local priorities, and should be held accountable by its electorate for its decisions. Lacking budgetary discretion, and also lacking serious taxing authority, means that provincial governments cannot, in practise, be held accountable. At a political level, the limited fiscal discretion of provinces has draw n criticism from various some quarters. One Premier noted in 2004 that provinces w ere being reduced to agencies for poverty alleviation and purveyors of social grants and health services, as opposed to being catalysts for economic grow th. Given budget allocations in that year, he observed that: In essence it boils dow n to a ratio of poverty to economic grow th that is 3:1In other w ords, economic grow th and social development become a lot less important in ter ms of provincial governments role Instead, there seems to be an assumption that provincial governments must focus on agency functions pertaining to poverty alleviation. That is health, education and for a short time still, provision of social grants. ..If this becomes 90%-plus of w hat provincial government is seen to be suitable for, frankly Mr Pr esident, w e might as w ell start to talk about provincial administrations or agencies as opposed to provincial government. The above statement highlights the view of some provincial governments that they have a role in fostering regional economic environment through the provision of infrastructure etc. The lack of fiscal discretion is perceived by some provincial governments as hindering their response to unique regional challenges and opportunities for development. There have, how ever, been alternative assertions that it is political rather than constitutional factors which have limited provincial discretion: The provinces have substantial legislative pow er so their passivity is a political rather than a legal phenomenon. Because of the cosy relationship betw een national and provincial governments in South Africa most of the important constitutional provisions that deal w ith provincial pow ers have not been interpreted. When provinces again decide to experiment w ith new policies the interpretive attitude of the Constitutional Court w ill play an important role in definitively deter mining the legal possibilities for provinces. A central government perspective holds that provinces often have too much latitude in resource allocation decisions, w hich undermine national policy outcomes. National line ministries have experienced frustration that provincial governments may opt to deviate from national funding guidelines, creating a disjuncture betw een national sector policy and provincial financing and implementation. This sense of frustration has resulted in increased regulations from national departments regarding nor ms and standards, as well as an increased tendency to make use of national grants. For example, section 34 of the Amended School Funding Nor ms 6 states that: It follows that national nor ms for funding schools cannot prescribe actual minimum amounts in Rands to be spent per learner, how ever desirable that might be.
Mini case study 4: School funding norms While the school funding nor ms as promulgated in 2000 w ent some w ay in mitigating intra-provincial inequalities, they did not resolve inter-provincial variations. School funding nor ms and standards for non-personnel recurrent
6 Amended National Norms and Standards f or School Funding, 31 August 2006, Government Gazette 29179.
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expenditure w ere introduced in the 2000 school year. While the nor ms did not prescribed per learner minima, they did make explicit w hich schools should be targeted. All provincial schools were evaluated in terms of their physical condition and the poverty levels of the community w ithin w hich they were located. The individual schools w ere then ranked from the most to the least poor, and then divided into five quintiles, based on learner profiles, community location and infrastructure backlog. Resources for both current and capital expenditure w ere then targeted to these schools on the basis of these provincial resource targeting lists. The school funding nor ms and standards w ere amended in 2007 to replace provincially based quintiles w ith nationally deter mined quintiles. The rationale for this w as that poverty is not equally distributed across provinces, and therefore equally poor learners could have differential access to funding depending on their schools relative ranking w ithin their respective provinces. The amendments also allow ed the national department of education to set per learner funding norms and minimum standards. While the amended norms and standards do not cover personnel costs in detail, the Minister of Education has set a ratio of personnel to non-personnel expenditure of 80:20 as a policy target. Within the personnel category, the Minister recommends that 85% of compensation of employees be directed at teaching personnel. More detailed guidelines w ere given on what should be financed by the school funding allocations (e.g. learner support mater ials, consumables of a non-educational nature etc). These guidelines are not how ever binding on provincial governments. Further national funding nor ms for Further Education and Training and Adult Basic Education are being finalised. Differences in per capital expenditures may be due to explicit funding decisions of the provincial executive councils. Provinces like the Western Cape and Gauteng w hich have some ow n revenue sources (though small in absolute ter ms) have more leew ay to supplement their equitable share allocation at the margin. In addition, in the poorer provinces, education spending in the past has often been crow ded out by social security spending before this w as taken up to the national social security agency in 2004/5. There is thus a tension betw een decentralised fiscal pow ers and the enforcement of national nor ms and standards: There are no easy solutions to these problems. If a provincial government has decided to fund one sector more than another, w hen compared to a national average or other provinces, this could be the result of legitimate and w ell-informed economic and social value decisions w ithin the province. It w ould be difficult to argue that in such a case a national norm should overrule the provincial decision. How ever, if a provinces deviation from some average is the result of exceptional health, social or other pressures, and education funding is crow ded out as a result, this w ould raise the necessity for the national funding mechanis m to take better cognisance of these pressures, in order that the division of revenue system may respond more accurately to real pressures. (Department of Education, 2003:21) One of the notable best practice elements of the provincial revenue sharing process is its reliance on formula-based allocations for the equitable share grants w hich are deemed to be more objective, less prone to political manipulation and more transparent. The equitable share formula depends heavily on demographic information and allocates to each provincial government their proportion of the pool of funds available
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to the provinces after the vertical division of revenue. This rand value of this proportion may or may not, how ever, match the cost of delivering the services which provinces are required to deliver. This w as illustrated perhaps most clearly in the case of social grants where rapid take-up rates of new grants and the impact of HIV/AIDS resulted in w hat is conventionally termed provincial overspending, but could also be view ed as national under-budgeting. In May 2000, the Financial and Fiscal Commission (FFC:2000) proposed its costed norms approach. This w as also a formula-based approach, but depended on estimated costing of national sector norms and standards for basic social services. It tried to create a clear link betw een any tentative proposal for the provincial equitable share and w hat that amount w ill buy in basic social services in each province (FFC:2000:7). The FFC acknow ledged that the insufficient data, the absence of clearly defined national nor ms and standards and limitations on costing capabilities w ould hinder the implementation of this approach in the short ter m, but believed it could be viable in the longer term given ongoing budget and other public sector reforms. This approach was however not accepted by government (National Treasury, 2001). As noted in the section on budgeting and financial management, Section 35 of the PFMA does require a costing of new national legislation w hich have financial implications for provincial government. In practice, parliamentary committees are not as vigilant as they could be in enforcing this requirement. National-provincial-local budget processes Tw o factors have recently impacted on municipalities fiscal capacity. The first is the abolition, since 1 April 2006, of the Regional Service Council Levy and its temporary replacement by a grant of roughly R8 billion in 2008/09 (National Treasury, 2008). A permanent local revenue source is required. National Treasury has already laid a few options on the table, including a local business tax, in a 2005 discussion document. Second is the fiscal impact on municipalities of the restructuring of the electricity industry. Each of these ultimately impact on the division of revenue. The local government equitable share has increased from R7.7 billion in 2004/05 to R24.9 billion in 2008/09, an increase from 4.3% to 7.6% of nationally collected revenues after the top-slice. Here the discussion on adequacy has revolved around whether services such as municipal health and fire-fighting should be included in the formula in addition to services already included in the formula (electricity, w ater supply, sanitation and refuse services). Municipalities w hich provide library and primary health care services are concerned about unfunded mandates. The estimated annual cost of unfunded mandates has been estimated for selected cities the table below (South African Cities Network, 2007:79). Table 7: Estim ated annual cost of unfunded m andates for selected cities Housing andHealth R m illions hostels eThekw ini R 152 R 244 Johannesburg R 135 Ekhuruleni R 113 R 215 Cape Tow n R 170 Nelson Mandela Bay R3 Source: SA Cities Network, 2007: 79 Museums R 29 Libraries R 121 R 63 R 145 Total R 547 R 135 R 391 R 324 R3
R9
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Another phenomenon of concern is fiscal dumping. The term fiscal dumping refers to the practice of government departments transferring unspent funds to low er spheres of government, external service-delivery contractors or public entities w ithout due consideration for their capacity to spend these funds effectively. There have been complaints in the health and transport sector about the transfer of funds to municipalities in the last month of the financial year. An example w as the transfer of funds from the Eastern Cape Department of Economic Development on 31 March 2000 (the last day of the financial year) to various parastatals: the ECDC, Eastern Cape Development Agency (ECDA), as well as the Centre for Investment and Marketing in the Eastern Cape (CIMEC) accounts. These funds should have been returned to the provincial treasury (Reported by the Daily Dispatch, 24.08.2006). The National Treasury had begun detecting tendencies tow ards fiscal dumping by provincial departments since the 2004/05 fiscal year, and subsequently included new requirements in the Division of Revenue Act which required that all transfers first be published. Further more, the Accounting Officers Guide (National Treasury, 2002:46) prohibits accounting officers from transferring funds to a province, municipality or NGO in order to conceal under spending in their ow n departments. Fiscal dumping is identified as a form of financial misconduct. Tendencies tow ards fiscal dumping continue to be closely monitored and investigated by the National Treasury and its provincial counterparts. Budgeting and Financial Management One of the crucial instruments of intergovernmental fiscal relations to ensure that national priorities receive due emphasis at sub-national level is conditional grants. The reform of the Municipal Infrastructure Grant (MIG) is regarded as an IGR good practice. Mini case study 5: Municipal Infrastructure Grant The MIG w as initiated in 2004 and amounted to R8.9 billion in 2007/08. Previously a number of conditional grants w ere made available by national departments to municipalities for infrastructural investment: the Consolidated Municipal Infrastructure Programme, the Local Economic Development Fund (both managed by DPLG), the Water Service Capital Grant ( managed by DWAF), the Community Based Public Works Programme ( managed by Public Works), the Building for Sports & Recreation Programme (Sport and Recreation SA) and the Urban Transport Grant (Department of Transport). MIG aimed to streamline this into a single channel in order to reduce the administrative burden on municipalities, introduce consistency in allocation criteria and give municipalities flexibility to deter mine their ow n capital expenditure priorities, rather than have these dictated by national departments. More capacitated municipalities are given more independence in how they spend their money. Allocations are transparently outlined in the annual Division of Revenue Act. Municipalities have also complained that intergovernmental grants are allocated to them by provincial and national departments w ithout taking their IDPs into consideration (Portfolio Committee of Provincial and Local Government, 2003). In recent years transfers from provinces have proven most problematic. The South African Cities Netw ork notes that w hile the management of conditional grants from national government has conformed w ith international good practice in ter ms of
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predictability and transparency:
This is not generally the case w ith grants received from the provinces which are quite often unclear, unpredictable and capricious. This makes it extremely diffic ult to plan properly, or to spend the funds timeously w hen they are received. The number of small grants exacerbates the problem and increases administrative burdens (South African Cities Network, 2007, 78). The annual Division of Revenue Act now requires that conditional grants to municipalities be aligned w ith integrated development plans. Section 216 of the Constitution also empow ers the National Treasury to stop funds to provincial governments and municipalities w ho are in persistent, material breach of treasury regulations, as a financial sanction. Instances of stopping transfers must be reported to Par liament for approval w ithin 30 days. Even if Parliament approves the stopping of the transfer, w hether there has been a serious or material breach remains potentially justiciable (Steytler, 2001:179). Conditional grants unlikely to be spent in the particular financial year are also rescinded by the National Treasury for reallocation (sections 26(1) and 27(1) of the 2008 Division of Revenue Act). In terms of section 27(2)a), if there is an intervention in ter ms of s100 or s139, the National Treasury may authorise the relevant national department or provincial department to spend unspent transfers which have been stopped. In the 2005/06 financial year, R746.6 million of the total R3.73 billion provincial grant allocations to Gauteng (R277.3 million), Limpopo ( R318.8 million), Free State (R51.3 million), Mpumalanga (R57.1 million) and the Northern Cape (R41.9) million w ere stopped by the National Treasury mainly for slow spending rates, but also for non-submission of infrastructure plans and quarterly reports. The stopping of funds should only be used as a last resort since it can have a deleter ious effect on the departments or municipalitys budget.
Mini case study 6: Eastern Cape Department of Housing conditional grant in 2007 The Herald Online : R500m grant reclaim over lack of staff THE drastic decision by national government to reclaim R500- million in conditional grants - money ring-fenced for building homes for the poor in the Eastern Cape comes after over a decade of failure by the provincial housing department to hire the necessary engineers, managers, tow n planners and building inspectors to build houses for the masses. So says Public Service Accountability Monitor (PSAM) housing researcher Chantelle de Nobrega after the unit's latest research showed the department has almost no engineers, tow n planners and skilled staff to build the 800 000 homes needed in one of the poorest provinces. In 13 years of democratic rule, the PSAM says just over 260 000 government homes have been built in the Eastern Cape at a w ildly varying rate of betw een 10 000 and 60 000 a year. The figure, w hich is declining, includes homes stalled mid-construction after 2000. This means the province is barely a quarter of the way to finishing the job. But, no-one is quite sure exactly how many houses are needed. De Nobrega believes the department's inability to fill a massive 80 per cent shortfall of critical staff, and 65% (2 429) shortage of general staff, has led to a scepticism from both national and provincial treasuries and a reluctance to release
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money.
While the researcher pointed out a string of provincial housing errors of judgment, financial mis management, maintaining a silence amid chaos or stagnation, and housing subsidy fraud, she says the expenditure of the budget for existing personnel has improved tremendously from underspending of up to 50% prior to 2003, to 14%, 4%, and 1% and 13% in the years since. De Nobrega said by March 31 this year, the department had only nine chief and deputy- chief engineers and needed another 46, and needed 106 tow n planners to join only tw o currently in the department. It had only 19 control technicians (building inspectors) but needed 60 more. There w as also a shortage of executive, general and senior managers, as well as chief industrial technicians. This w as according to the 2006/7 annual report released in October. "How do you service a budget of over R1-billion if you don't have the staff?" she said. She says the chief directorate of housing development, headed by general manager Ngw adi Mzamo, is proposing to appoint senior managers to the province's district municipalities. "These district-based managers w ill start hiring people w ith technical expertise, who will be based at district-level, but will w ork in the municipalities under them." She w ondered if the department's so-called "turnaround strategy" would be put on hold if the department lost a third of its budget. The department has already set up its first-ever project management and quality assurance directorate, which w ill comprise mainly technical staff, engineers, project managers, tow n planners and inspectors. The department also received a qualified audit last year, compared to the previous four years when the Auditor General issued audit disclaimers stating financial records w ere so poor no opinion could be rendered as to w hether the money w as spent as intended. He particularly noted that the department w as not monitoring pay ments to municipalities and developers and therefore he had no w ay of establishing the extent of "fruitless and w asteful expenditure" on sub-standard housing. De Nobrega said National Housing Minister Lindiw e Sisulu could not only blame municipalities and the provincial housing departments for poor performance. "The Housing Act makes it a national responsibility for the housing department to intervene if a province is unable to fulfil its mandate or task, and the Eastern Cape is clearly struggling." Stopping of funds may serve a punitive function but they seldom address the underlying issues of non-performance in spending w hic h requires capacity building and support (these are discussed in more detail in the follow ing sub-section). A complex decentralised fiscal system w ith multiple decision-makers across several spheres of government w ithin a particular sector and fragmented budgets requires systems for coordination, reporting and monitoring in order to be effective. In the early days of the provincial governments, no such systems existed. As a result incipient provincial overspending episodes in 1996/97 w ere not detected early enough by national government. By 1997, the then Department of State Expenditure had out in place its Early Warning System to monitor the financial status of provincial governments . It w as how ever aimed mainly at financial control and fiscal discipline rather than effective financing of service delivery. The Intergovernmental Relations Audit of 1999 observed that:
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The Department of State Expenditure does have an early w arning system for monitoring the financial situation of the provinces. There is, how ever, no system in place to monitor the effectiveness or efficiency of public expenditure service delivery. The quality of management information remains a problem. In general, until the publication of the Intergovernmental Fiscal Review there w as no information on the actual spending of provincial governments from their inception in 1994 until the 1998/99 fiscal year. There is also no official source of data that compares sectoral actual expenditure across provinces. For example, there is no information that allow s for the comparison of actual education spending per capita across the provinces. (DPLG et al, 1999:109) One of the major reforms at national and provincial level has been the improvement in the quality and comprehensiveness of financial data since 1994. These data are regularly published in the Budget Review and the Provincial Budget and Expenditure Reviews, Local Government Budget Expenditure Reviews. All of these are easily accessible on the National Treasurys website. Credible and consistent service delivery data, how ever, remains a challenge for all three spheres, especially in relation to outcomes and impact. In addition to year-end monitoring, regulations in ter ms of the Public Finance Management Act of 1999 and the Municipal Finance Management Act of 2003 have made monthly financial reporting and quarterly performance reporting against standardised formats mandatory. This has improved the quality of in-year financial monitoring as an early w arning system. Conflict resolution and disputes in budgeting and financial m anagement The division of governments limited resources among the three spheres of government is inherently conflictual due to several claims being made on limited resources. The IGR Audit (1999) cited examples of interactions in the Budget Council which has so far served to contain the inevitable conflict of interest betw een provinces and national government, such as that of the Western Cape, w hich despite its criticism of the Census data, did not take national government to court The Municipal Finance Management Act of 20037 deals w ith disputes betw een a municipality and other municipalities or organs of state. Before resorting to litigation, the parties must attempt to resolve the issue themselves and report it to the National Treasury (unless the Treasury is also party to the dispute). They can either mediate the dispute themselves or have the National Treasury nominate a mediator. There has how ever been a court case in respect of revenue sharing, revolving around w hether district municipalities are eligible for equitable share IG grants. Mini case study 7: Utukhela Constitutional Court case One intergovernmental dispute, possibly w ith underlying ANC- IFP antipathy, came to a head in the 2002 Constitutional Court case of Uthukela and Others v President of the Republic of South Africa and Others. The dispute w as over whether the national government w as obliged to provide district municipalities directly w ith an equitable share of national revenue. Three IFP-controlled district municipalities Amajuba, Uthukela and Zululand claimed that many [district] projects that relied on the equitable share to function had ceased to operate or had run into large deficits, and as many as seventeen projects concerned w ith the provision of essential services of water and sanitation had been ceased [sic] due to the lack of finances.
7
Section 44
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Thus the district municipalities argued they had a constitutional right to an equitable share of revenue to their constitutional duties as a body of local government. The case cited a total of 67 respondents, including the President, national Minister of Finance, national Minister of Provincial and Local Government. The other respondents w ere the Premier, MECs for Finance and Traditional and Local Affairs, Kw aNaloga, and the remaining district and local municipalities in the province. As a legal issue, the High Court easily resolved the question in favour of an equitable share for districts. Only three respondents opposed the application to the Constitutional Court to confirm the order: the President, national Minister of Finance, national Minister of Provincial and Local Government. Three local municipalities filed affidavits opposing the applicants, w hile tw o districts supported the relief sought. The Constitutional Court focused on whether the parties to the dispute had exhausted the demands of cooperative government in Chapter 3 of the Constitution. Section 41(3) in particular demands government organs to only resort to the courts as a last resort. No evidence came forth of any attempts to resolve the dispute through any meaningful negotiation or arbitration before resorting to the courts. Thus a unanimous Court declined to confirm the ruling, and then sent back for the parties to resolve themselves. Disputes may also arise over the financing of joint projects. The financing arrangements of Green Point Stadium as part of the 2010 FIFA World Cup is a case in point: Mini case study 8: Green Point Stadium , Cape Town, and Moses Mabhida Stadium , eThekw ini Concerns about intergovernmental fiscal relations threatened to disrupt the building of the new Green Point Stadium in Cape Tow n which has been earmarked as a venue for one of the semi-final matches in 2010. Mayor Helen Zille refused to sign the contracts w ith construction companies until greater clarity was obtained about the funding arrangements for the new stadium. This led to tensions betw een the City and the Provincial Government as it w as seen as a lack of support for the Western Capes hosting of the tournament. The City of Cape Tow n was concerned about a possible shortfall in the funding of the stadium and the implications for the Citys other capital expenditure plans should it need to make up any funding shortfall. After further consultations and discussions involving the three spheres of government, as w ell as the Local Organising Committee, an agreement w as reached on the funding of the stadium and construction has commenced. The breakdow n of funding is as follow s: National Government Grant R1,93bn DBSA Planning Grant R30m Provincial Government of the Western Cape R212m City of Cape Tow n R400m In eThekw ini, concerns arose w hen National Treasury offered the city R1,8bn for the new stadium but an escalation in building costs pushed the costs up to R2,6bn. The City insisted that the shortfall could not be funded by the City.
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Nevertheless, fears arose that the City w ould implement significant increases in rates to cover the shortfall.
The municipality and the Kw aZulu-Natal Provincial Government participated in a mediation process whichresulted in an agreement betw een both parties to contribute to the shortfall. The Pr ovincial Government agreed to contribute R300m tow ards the construction costs (Selemo Strategic, 2007).
5.4 Pressure Points Intergovernmental Budgeting

There is a perceived danger of making policy through the budget. It is policy priorities w hich should drive the budget and not the other w ay around. There are signs that the latter is happening. There is a need for a mechanis m that systematically links the policy-making process to the budgetary process. While structures, such as Cabinet Committees, Cabinet Clusters, the Forum of South African Directors-General (FOSAD), and the Cabinet Office and the Policy Unit w ithin the Presidency, exist, their role is not w ell defined in Treasury and other budgeting processes. There is a concern that national policy agreed to in forums like MinMECs and extended Cabinet w ith intergovernmental representation are still not adequately funded at provincial level. This clearly has a detr imental impact both on performance and accountability. Policies are taken at national sectoral level w hich have fiscal and budgetary implications for the local government sphere as a whole. Often assessment of the cumulative effect of such policy and programmatic decisions is not adequate, creating fiscal pressures for local government. One example is the decision to abolish RSC levies at the same time as Department of Minerals and Energy proposals to restructure the electricity distribution industry. Both these decisions impact negatively on local government fiscal space, at a time in w hich the assignment of more functions to local government is being contemplated. Closer links need to be forged betw een PGDS at provincial level and provincial budget allocations, and betw een IDPs and budgets at local government level.
6. INT EGRAT ED SERVICE DELIV ERY IN A DECENT RALISED CONT EXT

Integrated service delivery requires joint w ork across specif ic functional areas and organisations, as w ell as overall operational coordination and alignment. Integrated policy making and planning, should be supported by complementary harmonised implementation strategies. Ideally this should result in a seamless w eb of services that cuts across jurisdictional boundaries. The Intergovernmental Relations Framew ork Act of 2005 provides a general legal framew ork for written Implementation Protocols as a mechanis m by w hich two or more organs of state must cooperate in order to exercise a statutory power, perform a function, implement a policy or deliver a service. The implementation protocol sets forth the anticipated outcomes of the joint w ork, details roles and responsibility, the
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sources of funding and other resources and their envisaged use, performance targets and oversight mechanisms to ensure that the intended outcomes materialise. The IGRF Act envisages that intergovernmental forums be used to coordinate implementation protocols. Monitoring the implementation of those protocols should also therefore ideally be standing items on their meeting agendas. Section 40(2) of the Intergovernmental Relations Framew ork Act of 2005 requires that all implementation protocols and agency agreements for service delivery should include a dispute resolution protocol. Joint w ork may vary widely in scale, scope, content and the spheres of government involved. They may be defined as: Those programmes that transcend the conventional organisational boundaries in planning, budgeting and implementation resulting in a number of departments/ agencies/ministries responsible for one aspect of the programme, although none is responsible for it in its entirety. There are numerous challenges associated w ith successful joint w ork. These include: the definition of clear mandates to intergovernmental and inter-departmental task teams, the need to map intergovernmental programmes and projects on to individual public institutions budgets, effective decision-making w hen the number of relevant stakeholders is large and authority and accountability is diffused and the need to create a culture of joint w ork rather than a fixation on individual institutional achievement Performance contracts of managers may have to be amended to ensure that joint work is seen as a fundamental part of their core business rather than an optional add-on. In addition, integrated service delivery w as complicated w hen provincial department service delivery areas (e.g. health or education districts) were not contiguous w ith municipal boundaries. Redefining provincial department service delivery areas to make them co-ter minous w ith municipal boundaries has helped somew hat. The table below summarise some of the interactions betw een the IGR system and implementation processes across the three spheres of government, each of which is dealt w ith in greater detail below .
Table 8: Integrated service delivery in a decentralised system IGR SYST EM COMPONENT IGR Legislation IGR Forums/Bodies IGR Processes IGR instruments NATIONAL IGRF Act Programme and project governance structures eg MIG Implementation protocols PROVINCIAL IGRF Act Programme and project governance structures eg MIG Implementation protocols Multi-purpose Community Centres Har monising service delivery boundaries LOCAL IGRF Act Programme and project governance structures eg MIG Implementation protocols ISRDP and URP FIFA 2010 Human Settlements Alexandria Renew al Project Contractual
Conflict resolution
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and disputes
disputes on agency agreements
Previous Gauteng Premier, Mr Sam Shilow a observed in 2004, that w hile the introduction of the Presidents Coordinating Council and other intergovernmental forums have improved communication among the executive arms across spheres, the challenge of co-ordination of activities and projects implementation among the three spheres of government remains: An example that comes to mind is the implementation of the urban and rural development projects. While these projects are by design and conceptualisation joint projects involving all three spheres of government, the practical reality has been that provinces and municipalities often find themselves carrying the financial burden for implementation of the projects. In some areas, no w ork has been done since local and provincial governments rely heavily on the initiatives of national government. This problem could be attributed in part to lack of protocols governing joint planning, funding and implementation of integrated development projects and services that involves all three spheres of government. 6.2 IGR Processes In order to promote good practice in integrated service delivery, the dplg published an Implementation Protocol Guide in 2007 as part of its IGR Toolkit a comprehensive guide to the management and practice of IGR. The adoption of Implementation Protocols is a foundation for joint w ork and planning. A recent example w here implementation protocols have been used as instruments of intergovernmental coordination has been in the case of the former cross-border municipalities. In the original demarcation process, 284 municipalities w ere established including 16 municipalities w hich straddled the boundaries of two provinces. Provinces could exercise joint executive authority over the municipality in terms of the Municipal Structures Act. Sector departments (such as health, education, roads etc) from each provincial government w ould work separately in the municipality, and the provincial legislation of each province would apply to its geographic area of the municipality. Alternatively, provinces could agree that one provincial government w ould be delegated full executive responsibility for the entire area, w ith the other province ceding its pow er and authority over its portion of the municipality. Not surprisingly this led to problems relating to compliance w ith differing sets of provincial legislation, regulation and policies, duplicated accounting systems in order to ring-fence funds from the tw o provincial governments, service delivery coordination problems and duplication of reporting lines. Mini case study 9: North West Northern Cape Im plementation Protocol An example of a successful Implementation Protocol implemented in a former CBM w as the arrangement made betw een the North West and Northern Cape Provinces in the area of transport, roads and community safety. According to the Implementation Protocol betw een the North West and Northern Cape Provinces signed on 28 February 2006 by the Premiers of North West and Northern Cape Premiers: All staff associated or connected w ith the delivery of services within the affected areas shall be transferred from Northw est to Northern Cape w ith effect April 01, 2007. The new demarcation of the provincial boundaries of Northern Cape and
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North West has affected personnel and assets of the Department of Transport, Roads and Community Safety w hich will be transferred to two different departments in Northern Cape. These are: Department of Transport, Roads and Public Works and the Department of Safety and Liaison. to ensure a s mooth transition all personal files and assets have been handed over to the Northern Cape (Selemo Strategic 2007b). Mini case study 10: North West Gauteng Mpum alanga These provinces established a task team to manage the transition. Gauteng agreed to manage all housing projects until the financial year end (2007/8). Remaining challenges included the lack of optimal coordination among sector departments to resolve issues w ithin timeframes; the need for some Service Level Agreements to be amended and updated to allow for the completion of housing projects that were delayed; and the transfer of assets belonging to provincial state-ow ned entities (Selemo Strategic 2007). .
Mini case study 11:Mpum alanga Lim popo Joint collaboration by the respective Premiers allow ed for progress to be made with respect to roles and responsibilities in the provision of education including staff transfers, budgets, and the reallocation of funds. Outstanding issues included the transfer of teachers to Limpopo, contractual obligations in respect of building of schools in Limpopo, and infrastructure in Greater Groblersdal and Marble Hall Municipalities (Selemo Strategic 2007). While there are areas where implementation protocols have already been implemented successfully, their adoption w ill need to be much more w idespread. One area w here this has already been recognised is in the area of land reform. Mini case study 12: Settlement and Implementation Support (SIS) Strategy for Land and Agrarian Reform The Department of Land Affairs (DLA) has accepted the necessity of reframing land reform as a joint programme of government, coordinated by DLA in partnership w ith the Department of Agriculture, the private sector and civil society. The SIS strategy w ill aim to ensure that land reform is integrated into municipal IDPs and supported through processes of area-based planning and settlement and implementation support. This w ill promote the alignment of the functions, budgets and performance criteria of all relevant departments. This w ill embody the Department of Public Service and Administration guidelines for joint programme management. Mandatory provincial and district forums established in terms of Intergovernmental Relations Framew ork Act will be used as intergovernmental institutional vehicles for securing coordination: If properly pursued, the Act should allow for the negotiation of provincemunicipality - area-w ide enforceable implementation protocols that specify departmental and municipal legislative mandates, responsibilities, human resources and budget commitments in the provision of SIS services. This w ill require DPLG, the Department responsible for IGRFA, to play an active role in
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building understanding of the Act and the drafting and monitoring of implementation protocols in ter ms of the Act.
Clearly, making intergovernmental relations w ork involves much more than just getting the parties around the table. DLA and its partners w ill need to undertake a provincial-level institutional analysis to identify the relevant national and provincial departments and parastatal agencies that have legislative mandates to support land and agrarian reform. It w ill need to profile their current staff, skills and budgets, and identify capacity gaps. Together w ith the relevant departments, and using the PIF and DIF forums, it w ill need to develop strategies to address identified shortcomings. (Sustainable Development Consortium, 2007:244) One of the challenges of integrated service delivery is a lack understanding of operational definitions around intergovernmental relations. (See Mini case study 16: Working definitions of core IGR concepts on page 55).
6.3 Lessons from practice: Integrated Service Delivery

The preparation for the 2010 FIFA World Cup is a good illustration of joint w ork which requires far-ranging inter-sectoral and inter-sphere collaboration. These range from ensuring the broadcasting of the event to a global audience (Department of Communication), unconditional visas for FIFA role-players and special immigration procedures for participants (Department of Home Affairs), comprehensive medical and disaster management services in the host cities (national and provincial Departments of Health), sports facilities (national and provincial Departments of Sports and Recreation), passenger transport and roads (national and provincial Departments of Transport), protection of FIFA trademarks and merchandising ( Dept of Trade and Industry) to name but a few stakeholders. Dedicated institutional coordinating structures include: the Local Organising Committee (LOC), the Inter- ministerial committee chaired by the Deputy President, the (National) Technical Coordinating Committee, the Host Cities Forum w hich is the primary IG structure, the Provincial Coodinating Committees and the Integrated Project Office. Various departments and municipalities have also set up internal units to discharge their 2010 related responsibilities, inter alia, the DPLG, National Treasury, Department of Sports and Recreation, Department of Transport and the City of Tshw ane. Host Agreements w ere entered into by the LOC w ith each of the host cities to provide support requested for the conduct of the tournament, the operation of stadia and training grounds, especially on match days. Host cities have also entered into agreements w ith their provincial governments to set in place governance structures to oversee the preparations and to delineate roles and responsibilities.
Mini case study 13: Clarifying Mangaung and Free State Provincial Government FIFA 2010 Roles and Responsibilities In February 2006, the Mangaung Host City and the Free State Pr ovincial
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Government launched its governance structure for its 2010 preparations at a stakeholder w orkshop. The governance structure defined how the tw o spheres of government w ould w ork together w ith the sole purpose of preparing for the 2010 FIFA World Cup. Role Clarification between Mangaung Host City and Free State Province It w as concluded that the roles of Mangaung Host City and the Province w ould be broadly defined as follow s: The Mangaung Host City is responsible for the development, implementation and hands-on management of all the activities necessary to ensure a successful 2010 FIFA World Cup tournament. The Free State Province is responsible for providing a facilitating, supporting and monitoring role to ensure that the Free State Province in general benefits from the hosting of the 2010 FIFA World Cup tournament in Mangaung, in accordance with the broader objectives of the Free State Provincial Grow th and Development Strategy (PGDS) and National Government priorities. Institutional Arrangements The committee structure adopted by Mangaung and Free State province comprises of three levels: Political Committee Technical Committee Sub-committees (e.g. Transport, Safety and Security) Key Drivers for Functioning of the Committees The functioning of the committees w ill be informed by the follow ing key drivers: Focus to be placed on cooperative government The preparation plan to address objectives of the Free State, specifically IDP priorities and Free State Grow th and Development Strategy The plan should facilitate the active participation of the private sector and neighbouring municipalities, for instance resources from other Cities could be utilised The hosting of 2010 in Mangaung should also benefit other areas w ithin the Free State Pr ovince Adm inistration The committees and sub-committees operate through the 2010 Mangaung World Cup Office to ensure that a secretariat function is adequately provided and that alignment of processes and proper coordination of activities is facilitated (Source: Selemo Strategic, 2007a) While there have been some improvements in integrated service delivery across the three spheres, this is clearly an area that w ill require intensive focus over the medium term. 6.4 Pressure Points Clear mandates are needed to intergovernmental and inter-departmental task teams. There is a need to map intergovernmental programmes and projects on to individual public institutions budgets for effective decision-making. This is important w hen the number of relevant stakeholders is large and authority and accountability is diffused and there is need to create a culture of joint w ork, rather than a fixation on individual institutional achievement.
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Performance contracts of managers may have to be amended to ensure that joint work is seen as a fundamental part of their core business rather than an optional add-on. National government needs to set more clear direction on integrating of programmes. Local and provincial governments rely heavily on the initiatives of national government. Implementation protocols governing joint planning need emphasis and development, together w ith mechanis ms for joint funding and implementation of integrated development projects and services that involves all three spheres of government. 7. IGR CONFLICT RESOLUTION, DISPUT ES AND INT ERVENTIONS
7.1 Legislation and context

The Constitution requires that spheres of government and organs of state w ithin spheres should avoid litigating against one another. The Court may enforce this duty by referring a dispute back to the parties if the requirements of section 41(3) have not been met. While the lack of incidence to litigation has been limited, and the IGR system has resolved most disputes, the Constitutional Court has in a number of cases refused to hear a matter because parties failed in their basic obligation to pursue alternative dispute resolution methods. Interventions (outlined in section 139 of the Constitution) compr ise a continuum of actions from less intrusive to more intrusive to be used proportionally to the seriousness of the breach as a measure of last resort. These include issuing a directive to the council describing the extent to w hich it has failed to fulfil its executive obligation and w hich steps are required to meet its obligations 8, directly assuming responsibility for that obligation 9 and dissolving the council and temporarily appointing an administrator 10. Initially intervention w as at the discretion of the provincial executive, but in 2003, the section w as amended. Section 139(5) compels the provincial government to intervene if the municipality is in a financial crisis and as a result it is seriously or persistently in breach of its obligation to render basic services or to meet its financial commitments. Only the Constitutional Court may settle intergovernmental disputes betw een organs of state in the national and provincial sphere in relation to their constitutional status, pow ers and functions (section 167(4)a). Chapter 13 of the Municipal Finance Management Act of 2003 outlines the role of the MEC for Local Government w hen financial problems in a municipality are detected. The first, preliminary steps are investigating the seriousness of the problems, determining w hether the problems could be remedied by a financial recovery plan, and consulting w ith the municipality to obtain its cooperation in solving the problem. If the province is of the opinion that the problems can only be solved by implementing a financial recovery plan, the first intervention takes place through the imposition of the plan. A second intervention step may follow w here the municipality fails to implement the plan. Intervention then takes place in terms of section 139(1) of the Constitution.
8 Section 9
139(1)(a) Section 139(1)(b) 10 Section 139(1) (c)
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Conflict resolution and disputes Because of concurrency w ith overlapping responsibilities and joint jurisdiction over the same geographic jurisdiction and different spheres of government having their ow n interests it is not surprising that disputes may arise. International experience suggests that litigation is less likely if there is a single dominant party at national and sub-national levels. Chapter 4 of the IGR Framew ork Act of 2005 gives effect to the constitutional requirement in section 41(2)(b) that an Act of Parliament must provide for appropriate mechanisms and procedures for intergovernmental dispute resolution. Section 45 prevents the parties from resorting to judicial proceedings during the informal stage of the dispute resolution process unless the dispute has been declared a formal intergovernmental dispute in ter ms of section 41(1) of the Act. The dplg (2006) has published a practice guide to preventing and settling intergovernmental disputes. Good practice encourages a number of steps: Deter mining the nature of the dispute Negotiating Declaring a dispute Convening a meeting Defining the dispute and identifying an existing dispute resolution mechanisms Appointing a facilitator Participating in good faith in the dispute resolution process Asking for the assistance of the MEC or Minister Implementing and monitoring the agreement reached, or going to court. It is possible that a dispute may arise from an intervention (in sections 100 and 139 of the Constitution). Section 125 (4) of the Constitution requires that any dispute relating to the administrative capacity of a province to perform any function be referred to the National Council of Provinces for resolution w ithin 30 days of referral. This may be regarded as non-judicial form of dispute resolution, but does not detract from a provinces right to litigate, as evidenced here: Even w here a specif ic non-judicial mechanism for intergovernmental disputes is provided for in the Constitution, the Constitutional Court retains, nevertheless, as final arbiter of the Constitution, its supervisory function. The obligation of referral to the National Council of Provinces (NCOP) of a dispute regarding a provinces capacity to administer national legislation (in ter ms of section 125(4) of the Constitution) does not deprive the province of its right to have that dispute resolved by the courts. The Constitutional Court held in its First Certification Judgement that the provision merely fixed the time in w hich the dispute must be resolved though non-judicial procedures and did not detract from a provinces right under section 167(4) of the Constitution to have the dispute resolved by the Constitutional Court. When a province intervenes to assume executive responsibility in ter ms of section 139 (2)(a), this has to be approved by the Minister of Provincial and Local Government. Should a dispute betw een the province and the municipality arise, the Minister is in the position to act as an independent arbiter. Disputes could also conceivably arise around w hether national government is adequately fulfilling its support role to provinces or whether national and provincial
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government are adequately supporting municipalities. It is a point for discussion that such disputes are best settled through political settlement as evidenced below . Disputes regarding obligations of support and pow ers of supervision are usually better suited to a political settlement. It is essentially a political judgement w hether national government is fulfilling its duty to assist provincial governments (section 125(3)). The same can be said of the national and provincial governments duty of support to local government (section 154(1)). Moreover, as such a dispute has huge cost implications, a court is not the most suitable institution to decide calls of entitlement. The supervision of provinces (section 100) and municipalities (section 139) by national and provincial governments respectively entails factual disputes, judgement calls and policy disputes
7.2 IGR Processes Betw een 1998 and 2005, there w ere 16 interventions in ter ms of section 139, distributed over five provinces11. The failures w hich triggered the interventions fell into three broad categories: 1. Governance: political infighting, conflict betw een senior management and councillors, human resource management issues. 2. Financial: Inadequate revenue collection, ineffective financial systems, fraud, misuse of municipal assets and funds. 3. Service delivery: Breach of sections 152 and 153 of the Constitution w hich outline service delivery obligations of municipalities. The vast majority of these interventions were conducted in terms of section 139(1)(b). Directives in terms of section 139(1)(a) were not often issued. It w ould have been preferable if the provincial executives had adopted a more incremental approach, issuing a directive as a first step (The dplg, 2005). A Manual for the application of section 139 of the Constitution w as published by the Department of Provincial and Local Government IN 2000. It has also issued Guidelines on interventions in terms of sections 100 and 139. (The dplg, 2007). This will help to ensure that all stakeholders have clarity on the legal basis, appropriate steps and procedural requirements of section 139.
7.3 Lessons From Practice

Conflict resolution and disputes Section 86 of the Structures Act deals w ith the resolution of disputes concerning performance of functions or exercise of pow ers. If a dispute arises betw een a district and a local municipality concerning the performance of a function or the exercise of a pow er, the MEC for local government in the province, after consulting them, may, by notice in the Pr ovincial Gazette, resolve the dispute by defining their respective roles in the performance of that function or in the exercise of that pow er. Clearly, the less precise the definition of the scope of a pow er or function, the more room for conflicting interpretations and thus for potential conflict. The Gauteng Monorail link case study below highlights competition betw een
11 North
West, Free State, Northern Cape, Eastern Cape, Mpumalanga and KwaZulu-Natal
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provincial government and the metro on built-environment issues. Fortunately, a political resolution rather than litigation ensued.
Mini case study 14: Gauteng Monorail link In early December 2006, the Council of the City of Johannesburg approved a system of a Bus Rapid Transit System called Rea Vaya, w hich has been successful in South Amer ica and other developing countries. On the 16 May 2007 the MEC for Finance and Economic Affairs in the Gauteng Province announced to the media the launch of a 45 kilometre Monorail to run betw een Sow eto and Johannesburg. He indicated that the project w as approved by the Gauteng Province though a memorandum of understanding, that the feasibility study had been concluded and that the project implementation w ould commence in September 2007 and become operational during 2009. The Gauteng Economic Development Agency had signed an agreement w ith a Malaysian consortium, New cyc Vis ions, w ho w ere to implement the project, w hich represented a private sector investment of R12 billion. An independent assessment of the monorail proposal by an international transport organization indicated that the proposal w as seriously flaw ed. While no public response w as forthcoming from the City of Johannesburg, a statement w as issued by the national Minister of Transport on 23 May 2007 emphasizing that he had had no know ledge at all of the proposal prior to the announcement by the Gauteng Province and that the province had not consulted with, discussed or sought approval from his Ministry for the project. He re-iterated that the lead project for the area w as the Rea Vaya project and added that on 7 May he had met the Mayor of Johannesburg together w ith members of his Mayoral Committee and there w as no discussion of the monorail proposal. The Minister stressed that the National Land Transport Transition Act specified rail as a national responsibility that the monorail w as a version of rail transport, and thus any project of this kind had to fall under the national department. A meeting appears to have been held subsequently betw een the Minister and the Gauteng MECs for Transport and Finance, w here it w as agreed that the MECs w ere welcome to try to do further work to build a case for the monorail. During this time significant political pressure appears to have been placed on the City of Johannesburg to go along w ith the monorail proposal. The pressure continues, although has somew hat reduced after a press statement issued by national cabinet after its meeting on 8th August 2007. The statement said that cabinet had received a report on the Sow eto Monorail Project and that the meeting noted that that there were major shortcomings in the process leading to the announcement of the project. These included lack of consultation w ith key stakeholders such as the Minister of Transport, the City of Johannesburg; the taxi industry and the South African Rail and Commuter Corporation and the fact that no thorough financial viability study had been conducted. Cabinet decided that the Sow eto Monorail project w ould not proceed at this stage, and advised the Gauteng Provincial Government accordingly. Cooperative government requires that organs of state exhaust all non-judicial options before resorting to litigation. The Constitution Court, how ever, can clarif y functional
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responsibilities: Mini case study 15: Liquor Bill In Ex parte President of the Republic of South Africa In re: Constitutionality of the Liquor Bill, the Constitutional Court had to decide w hether national Parliament could promulgate a law on the manufacturing, w holesale distribution and retail sales of liquor. Trade and promotion of industry is a concurrent function betw een national and provincial government reflected in Schedule 4 of the Constitution. Liquor Licences, how ever, are an exclusive provincial competency listed in Schedule 5. The Court found that the Bill w as partly unconstitutional. Licensing of production and distribution belonged at national level since it extended beyond a single province and crossed provinces. Retail sales, how ever, were a provincial pow er and therefore could not be regulated by the national government. Disputes have also arisen in the context of demarcation. Groblersdal Municipality initiated litigation to protest its exclusion from Mpumalanga and inclusion in Northern Province in the context of the border dispute over the Bushbuckridge area (DPLG, 1999, 130). A recent similar incident relates to Matatiele municipality discussed above in Mini case study 3: Matatiele Municipality and Others v President of the Republic of South Africa and Others. While all district IG Forums had dispute resolution mechanis ms, none have used them to date. Table 9: Recent interventions in terms of section 139 MUNICIPALITY Utrecht (eMadlengeni) Local Municipality (Kw aZulu Natal) EXECUTIVE OBLIGATION CIT ED BY PROVINCIAL GOVT In September 2006, the Department of Local Government and Traditional Affairs received reports of mal-administration, fraud, corruption in the municipality; Investigations w ere undertaken in this regard; Report implicated Mayor Khoza (w ho w as also the Speaker) and four senior council employees in maladministration, fraud and corruption, and Lack of undertaking legislative obligation by the municipality to invoke required disciplinary measures as per legislation. INT ERV ENTION STEPS Investigation in terms of s106 of the Municipal Systems Act Directive in terms of s139(1)(a) Assumption of executive responsibility in terms of s139(1)(b) in relation to taking the disciplinary actions required The Council w as not how ever dissolved. The notification carried the suspensions of Cllr. Khoza, the Municipal Manager, Mr V M Khubeka and an employee of the Municipality. COMMENTS
On 14 May the Provincial Executive Council passed the report on to the Municipality for it to effect its ow n disciplinary actions within 21 days. The matter did not surface before the municipal council. After 90 days of inaction, this w as seen as complicity by those implicated in the report, and the PEC, after extensive deliberation, decided to intervene On 22 August 2007, the Provincial Executive resolved that: the Executive Council appoints special committee to investigate and make findings on allegations against the mayor and other councillors on
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MUNICIPALITY
EXECUTIVE OBLIGATION CIT ED BY PROVINCIAL GOVT
INT ERV ENTION STEPS
COMMENTS
Oudshoorn Local Municipality (Western Cape)
The pay ment of performance bonuses to Section 57 managers w ithout performance agreement, in contravention of section 57 of the Municipal System Act, 2000 (Act 32 of 2000); The extension of the employ ment contract of the Municipal Manager by the Executive Mayor without approval of the Municipal Council, which rendered the contract inconsistent with the legislation and therefore making the contract unenforceable. The general findings and recommendations of the Commission appointed by Provincial Minister concluded that there is internal strife and conflict in the Municipal Council and within the
Investigation in terms of s106 of the Municipal Systems Act Assumption of executive responsibility in terms of s139(1)(b) on 14 March 2007
mismanagement, maladministration, fraud and corruption in the municipality; the Executive Council appoint a special committee against municipal employees on breaches of Code of Conduct for Municipal Staff Members and all applicable legislation arising there from; the Mayor and the Municipal Manager and other employees be suspended pending the investigations; and the appointment of an Acting Municipal Manager. On 4 April 2007, the Minister of Provincial and Local Government approved the intervention on condition that: assumption by the Provincial Executive of the Municipal Councils pow ers be limited to the its executive pow ers; the Councils legislative pow ers, i.e. the pow er to adopt a budget, impose revenue raising measures and adopt by-laws, remain vested in the Council; that the Provincial Executive provide the Department w ith a recovery plan w ithin a month of the approval by the Minister; and the Provincial Executive provide the Minister w ith the terms of reference of the administrator that w ill
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MUNICIPALITY
EXECUTIVE OBLIGATION CIT ED BY PROVINCIAL GOVT administration.
INT ERV ENTION STEPS
COMMENTS
be submitted w ith the recovery plan clarifying in precise terms of what the pow ers of the administrator are, especially vis-a-vis the Municipal Council. On 22 October 2007, the Provincial Executive resolved: (1) To issue a directive in ter ms of section 139(1)(a) of the Constitution to the Council of Beaufort West Municipality to reconstitute and elect its representatives to the District Municipality within a period of tw o working days after approval of the intervention and to the Council of the Central Karoo District Municipality to reconstitute w ithin tw o working days after the Beaufort West Municipality has reconstituted and elected its representatives to the District municipality; and (2) Where such directives are not adhered to, the executive obligation of council to call a meeting or meetings, as the case may be, be assumed by the Minister of Local Government and Housing under the direction of the Provincial Executive in terms of section 139 (1)(b) of the Constitution. The Beaufort West Municipality has since reconstituted itself under the guidance of the Provincial Executive Council by also invoking the directive in ter ms of section 139(1)(a) of the Constitution. At the same time, the Beaufort West Municipality failed to elect five representatives into the Central Karoo District Municipality w hich eventually prevented the Central Karoo District Municipality from reconstituting.
Beaufort West Follow ing the period of Floor Crossing, Beaufort Local West Municipal council has Municipality failed to comply w ith the provisions of schedule 6B and item 6(b) of the Central Karoo Constitution, w hich indicates that w ithin 30 District days of the expiry of floor Municipality crossing (in this instance, 15 September 2007), all (Western the structures and Cape) committees of Category A, B and C municipalities must be reconstituted in accordance with applicable law .
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MUNICIPALITY Mbombela Local Municipality (Mpumalanga)
EXECUTIVE OBLIGATION CIT ED BY PROVINCIAL GOVT The Municipality is currently functioning with a high number of vacant funded posts; the Council has overcommitted itself in terms of the available budget for the construction of the 2010 stadium in contravention of the Municipal Finance Management Act; that there is only one LED official in the Municipality w ith the implications of not being able to fulfil section 152(1)(c) of the Constitution. the Municipality does not have sufficient financial management systems; and that the Municipality received qualified Audits in the previous tw o financial years.
INT ERV ENTION STEPS Investigation in terms of s106 of the Municipal Systems Act Directive in terms of s139(1)(a) Assumption of executive responsibility in terms of s139(1)(b)
COMMENTS
MEC had on 26 February 2007 instituted an investigation. The report on the investigations had been submitted to the Provincial Executive Council, w hich resolved that there w ould be intervention and support to the Municipality. How ever, the municipality, despite receiving the recovery plan in October 2007, failed, by December 2007, to table this formally in Council or carry out the actions required. The Pr ovincial Executive Council then decided to invoke an intervention in ter ms of section 139(1)(b) of the Constitution. The municipal council responded by 15 January 2008 by supporting the intervention by the Provincial Executive Council.
It can be seen from the table above that, in the recent past, more use has been made of less intrusive intervention measures such as directives. This is important in the light of court judgements (such as Van Wyl v Uys) which emphasise that spheres should respect the institutional integrity of other spheres. In this case the High Court w as asked to decide whether the MEC for Local Government has the right to suspend a councillor for breach of the Code of Conduct before the municipal council has concluded its own investigation. The Court ruled that an MEC can only remove or suspend a councillor after a request from the council. Where the ruling political party governing the municipal council subject to intervention is different from that of the province, concerns have been raised as to whether interventions have been politically motivated. In the Utrecht intervention, this w as one of the issues raised by an IFP member of the NCOP Portfolio Committee on Finance12. How ever, there has been no formal litigation in respect of intervention.
7.4 Pressure Points
12 Brief ing to the NCOP Portfolio Committee on Local Gov ernment and Administration by Mr Michael Mabuy akhulu, the KZN MEC for Local Government, 23 October 2007.
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There is no structure for alternative settlements for intergovernmental disputes. This may contribute to an inclination to pursue litigation. At this stage, the provis ions of the IGRF Act in respect of dispute resolution are still unmonitored and require further research. One of the intentions of the IGRF Act is to use intergovernmental forums as institutional mechanisms for review ing performance, detecting failures and ensuring corrective action. How ever monitor ing systems are still embryonic at District IG Forum level and indicate the urgency of national and provincial support mechanis ms for monitoring the w ork of the district forums.
8. EVOLVING PRACTICES IN INT ERGOV ERNM ENTAL MONITORING AND EVALUATION, SUPPORT AND SUPERVISION

The intergovernmental system is predicated on the principle that provincial government and municipalities exercise their pow ers and functions w ithin a regulatory framew ork w hich is supervised by one or more spheres. In a decentralised system w ith overlapping pow ers and functions, effective monitoring is essential to good government, the achievement of policy objectives and integrated service delivery. Section 125(3) of the Constitution imposes a duty on national government to support provincial governments and build their capacity to exercise their powers and perform their functions effectively. If a provincial government fails to fulfil its executive responsibilities, the national government may, as a last resort, intervene in ter ms of s100 of the Constitution. Provinces are also monitored by the national government in terms of sectoral legislation (e.g. health, education, roads) as w ill as the Public Finance Management Act of 1999. Both provincial and national governments have the duty to extend support to municipalities (sections 155(6) and 155(7) of the Constitution). If a municipality fails to fulfil its executive obligations, the provincial government may choose to intervene in ter ms of section 139 of the Constitution. If the municipality fails to pass a budget or is experiencing a financial crisis, the province must intervene in ter ms of section 139(5) of the Constitution. If the province cannot or w ill not exercise its intervention pow ers, the national government must intervene in its place in ter ms of section 100 of the Constitution. The Municipal Systems Act13 requires that the MEC for Local Government in a province establish mechanisms to monitor municipalities and their capacity development, and assess their support needs. The MECs are empow ered to request information from municipalities, and w here they suspect non-performance or misadministration, initiate an enquiry. The MEC may issue standard draft bylaws, model delegations, standing orders, guidelines and policy directives w hich a municipality may choose to adopt. Section 108 of the Systems Act, in particular, empow ers the Minister of Provincial and Local Government to establish essential standards and minimum standards for any matter assigned to municipalities. The Systems Act requires that municipalities establish a performance management
13 Secti ons
105 and 106
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system14, report on a set of key performance indicators to the Minister of Provincial and Local Government 15, produce annual performance reports 16 to be audited by the Auditor General 17. The Minister submits to Parliament and the MECs a general report on the performance of municipalities 18. The MEC for local government must annually compile and submit to the provincial legislatures and the Minister a consolidated report on the performance of municipalities in the province which identifies underperformance and remedial action taken. Monitoring of municipalities also takes place ter ms of the Municipal Finance Management Act and sectoral legislation (such as w ater, transport etc).
8.2 IGR Processes

The table below illustrates the range of instruments applicable to each sphere of government in respect to monitoring, support and intervention. Table 10: Monitoring, support and intervention in a decentralised system IGR SYST EM COMPONENT IGR Legislation NATIONAL Government-w ide Monitoring and Evaluation Framew ork PROVINCIAL PFMA Intervention LOCAL
IGR Forums/Bodies IGR Processes
IGR instruments
Sectoral M&E IT innovations eg DWAF GIS IGR system indicators: outcome and process
Systems Act: Performance Management MFMA Intervention Local Government Data Forum Interventions in Interventions in terms of s100 of terms of s139 of the Constitution the Constitution Quarterly Quarterly reporting performance on the SDBIP reporting, IDP Nerve Centre GIS Project Consolidate PIMS Centres GIS South African Cities Netw ork
Conflict resolution and disputes National and provincial supervision comprises a number of potential actions w hich range from less to more intrusive monitoring and support Monitoring, in the context of IGR, refers both to the monitoring of the overall system and its performance, as well as to the measurement of legal compliance and performance of one sphere by another. In monitoring the evolution of the intergovernmental system, the Intergovernmental Relations Audit recommended the formulation of key performance indicators, both outcome and process-based, for the measuring of the status of the IGR system.
14 15
Section Section 16 Section 17 Section 18 Section
38 43 46 45 48
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Indicators would serve to measure the implementation of the IGFR Act, relating to formal compliance and the achievement of IGR Framew ork Act goals. Appropriate indicators have been developed by the dplg in this regard (see Appendix A). Lack of formal monitoring systems exacerbate the difficulty of getting information on IGR practice, especially in relation to perceptions, levels and quality of participation and ow nership of the institution. Monitor ing of the intergovernmental system is also hampered by a lack of a common language and clear understanding of IGR concepts such as coordination, integration, consultation and alignment. For provincialmunicipal development planning, the Gauteng Departments of Local Government and of Economic Affairs defined for themselves key operational definitions for IGR. These are outlined in the textbox below . Mini case study 16: Working definitions of core IGR concepts Engagement: A process by which outcomes, policy directions and/or strategies in various plans are aligned w ith those in other plans. A process of ironing out possible differences between plans, strategies and framew orks, preferably in a constructive way, by seeking to ensure synergy in priorities, the sharing of information and focusing on the same geographic areas of focus. Alignment: The result of coordination and collaboration in planning processes. Not a mechanistic process of trying to ensure that every action in every plan is linked or lined up w ith every action in every other plan in the area. Integration: A process of bringing together different policies, projects, ideas, etc to ensure the achievement of shared objectives. Coordination: A process of bringing together different plans, ideas, etc. that can collectively ensure the achievement of key developmental outcomes. Collaboration: A process of constructively working together in planning processes around shared development objectives. Prioritisation: A process of ensuring that different actors in government (spheres and sectors) reach consensus on w hat it is that they seek to achieve in order of importance. Focus: A process of directing attention on the same geographic or sectoral area(s) of concern. (Gauteng Provincial Government, 2004) Monitoring of provincial governments Since 2003, the National Treasury has engaged extensively w ith the provincial government departments to put in place a system of standardised five year strategic plans, annual performance plans and quarterly performance reports which monitor progress of actual service delivery achievement and spending against plans. In May 2007, the Treasury published its Framew ork for Managing Programme Performance Information as part of the Government-w ide Monitoring and Evaluation
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Framew ork. It aims to clarify the standards and definitions for performance information in support of audits of non-financial information. While, initially, National Treasury systematised the process of defining non-financial information requirements, national concurrent departments, like the Departments of Education, Social Development and Health, have how ever also taken the initiative. In conjunction w ith their provincial counterparts, they have developed extensive indicators for service delivery monitoring. There is an ongoing convergence betw een the initiative of these concurrent national departments and the National Treasury processes, which has resulted in streamlining reporting requirements of provincial government departments. Monitoring of local governments - national m onitoring of m unicipalities At national level, the Department of Provincial and Local Government (the dplg) plays a major role in the monitoring of local government, along w ith other key national sectoral departments (such as the Departments of Agriculture and Water Affairs and Forestry). A 5-Year Local Government Strategic Agenda (2007-2012) has been developed for municipalities in order to ensure that local sphere delivers on its mandates. It focuses on mainstreaming hands-on support to local government to improve performance, governance and accountability and refining and strengthening the policy, regulatory and fiscal environment for local government, paying greater attention to enforcement measures. Data for the reporting against the 5 strategic objectives are obtained from various national departments, the various provinces (provincial processes coordinated by the Office of the Premier) and the various municipalities. As part of its mandate the dplg has refined the number of local government indicators it monitors, and reduced its number to 108. The department has developed templates against w hich reporting on the indicators can be done. This w ill form part of the Monitoring, Reporting and Evaluation Framew ork that the Department is currently developing for local government monitoring and evaluation. The Department is w orking closely w ith both the National Treasury and the Presidency in order to ensure alignment w ith the Programme Performance Information Framew ork and The Government-Wide Monitoring and Evaluation Framew ork currently being developed. In order to accomplish alignment, the department has released the Logic Model for Local Government. National Treasurys approach to planning, budget and M&E reform w ithin the local sphere w ill broadly mirror that of the national and provincial reform packages. Since local government finance reform is in its early stages with variable progress being achieved across municipalities (e.g. in terms of the implementation of MTREF19 budgeting and accounting standards, alignment of IDPs and budgets etc), the first thrust w ill be to ensure that the financial management basics are in place. This w ill provide a platform for increased emphasis on non-financial reporting. The dplg w ill continue to play an important role in respect of municipal non-financial reporting (service delivery outputs and outcomes). National Treasury will engage in a project over two years to develop an In-year Management and Reporting System for municipalities w hich w ill enhance the MFMA section 71 reports and form the basis of an early warning system. Currently National Treasury monitors the large municipalities directly w hereas oversight and supervision of the other municipalities is delegated to the relevant provincial Treasury. Initially the
19
Medium Term Rev enue and Expenditure Framework
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In-year Management and Reporting System w ill be focussed on the non-delegated municipalities, but w ill eventually be rolled out to all 283. National Treasury also plans on releasing comprehensive budget regulations in order to ensure standardisation and therefore better monitoring of municipalities. As such, National Treasury will implement in-year financial management reporting for all municipalities and introduce new reporting standards equivalent to a standard chart of accounts. This, together w ith changes to the budget formats of municipalities w ill align the budgeting and reporting processes w ithin municipalities. Greater emphasis w ill also be put on the monitoring of conditional grants. One of the developments tow ards this end w ill be the strengthening of the Municipal Infrastructure Grant (MIG) monitoring system. In order to strengthen municipal monitoring through the Service Delivery and Budget Implementation Plan (SDBIP), National Treasury w ill furthermore release guidelines on the compilation and implementation of the SDBIP. Quantifiable and credible service delivery targets w ill play an important role in monitoring and evaluation. The Programme Performance Information Framew ork w ill be applicable to all spheres of government, including municipalities. National Treasury and the provincial Treasuries w ill assess SDBIPs in order to check consistency w ith the IDP, budget and monthly and quarterly reports. National Treasury w ill continue to enhance the scope and quality of the data published annually in the Local Government Budget and Expenditure Review . Increased emphasis w ill be on the accurate reporting of actual expenditures, as well as budgets over a three year period. National Treasury is furthermore engaged in the Local Government Data Collection Forum, through w hich it w ishes to eliminate current duplication in information requests submitted to municipalities by various departments. Provincial m onitoring of municipalities Provincial treasuries have local government monitoring and support responsibilities in terms of the Municipal Finance Management Act of 2003. Some provinces have only recently established formal M&E capability, w hereas others are more advanced. Most of the Offices of the Premier monitor integrated development plans (IDPs) and their relation to the Provincial Development Grow th and Development Strategies. Provincial Departments of Local Government are also engaged in monitor ing and support activities to municipalities. The Minister of Provincial and Local Government noted in his 2007/08 budget speech that 6 provinces have established M&E units in their departments that deal w ith local government. Effective municipal monitoring by provinces depends crucially on cooperation betw een all the relevant role players, in particular, a clear and practical division of labour betw een provincial treasuries and provincial departments of local government. While monitoring has improved, there still are areas w hich require enhancement, especially in areas such as w ater and electricity w here provinces have regulatory but not functional competence, as recent research notes: Related to the lack of appreciation of the provincial and national oversight pow ers is the lack of appreciation of the functional scope of provincial oversight. It is readily accepted that provincial governments do not have w ater services or electricity services functions. This is despite the fact that provincial governments have the authority, in terms of Schedule 4B, read w ith section 155(7) of the
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Constitution, to oversee municipal performance on these issues. The functional evolution in these sectors has been that provincial governments are not involved in these functions, w hich is contrary to what the Constitution per mits. Support Issues of capacity have constrained the functioning of the intergovernmental system since its inception. Most concurrent national departments (such as transport, agriculture and health) have programmes w hich support their provincial counterparts. The National Treasurys Infrastructure Delivery Implementation Pr ogramme ( IDIP) has deployed technical assistance teams in the nine provinces to build capacity for project management in provincial Departments of Health, Education and Public Wor ks. Unfortunately, inability to spend conditional grants at provincial level (see Mini case study 6: Eastern Cape Department of Housing conditional grant in 2007) suggests that there is need to intensify support efforts in certain sectors and areas. The Eastern Cape Department of Housing has received some technical support from the Development Bank of South Africas Siyenza Manje programme. The Department of Provincial and Local Government has run several support programmes for local government for many years. These include Project Consolidate, the Extended Public Works Programme, the Integrated Sustainable Rural Development Programme, the Free Basic Services Programme, the National Disaster Management Centre, Integrated Development Planning Support, the Local Government Leadership Academy, the Municipal Service Partnerships and Local Economic Development. Many national departments also offer support services to local government (e.g. Department of Water Affairs, Department of Agriculture). The dplg is also supporting provinces to establish the appropriate forums to implement institutional and operational systems to monitor, evaluate and report on the Five Year Local Government Strategic Agenda (LGSA). Consultation on competency framew orks for local government is underw ay. The skills audit of local government is being undertaken in a phased manner. The Department w ill also support local economic development by providing targeted intergovernmental relations capacity building and systems support to 4 provinces and 23 district municipalities in 2008/09 (National Treasury, 2008b). An audit of Performance Management systems in municipalities has been completed. 141 municipalities had developed and formally adopted performance management system framew orks by May 2007.
8.3 Lessons from Practice

In respect to the challenge of developing capacity in all technical fields of government, the programme Siyenja Manje w as initiated. Mini case study 17: The Siyenja Manje Programme This programme, w hich was initiated in June 2006, is funded by the National Treasury and managed by the Development Bank of South Africa. The programme is seen as a complement to Project Consolidate. It is a response to severe skills constraints in under-performing municipalities, especially in relation to engineers, project managers, financial experts and development planners. The
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DBSA w as allocated R741- million by the National Treasury over a three-year period and has been tasked w ith using these funds to develop capacity in troubled municipalities. Since its launch, its has allocated 158 experts and 79 young graduates to municipalities, and government departments such as the Department of Water Affairs and Forestry and the Eastern Cape Department of Housing and Local Government (National Treasury, 2008b). Provincial support of local government An identified constraint to effective support is that currently monitoring and oversight functions are fragmented betw een national and provincial departments and, at provincial level, thinly resourced. This impacts on timeous detection of service delivery failures for the purposes of corrective action. The Government-w ide monitoring and evaluation System There has been grow ing recognition that municipal monitoring should extend beyond the monitoring of inputs to encompass also the benchmarking of local government processes, service delivery outputs and household and economic development impact. Not enough emphasis is put on the link betw een outputs from various departments and spheres and joint programme and project outcomes. The Offices of the Premier and other coordinating departments at national level could play a role here. In addition it could be a focus of legislative oversight, especially for the NCOP and provincial legislatures. The Government-w ide Monitoring and Evaluation (GWM&E) Policy Framew ork of 2007 as it becomes institutionalised - could support effective intergovernmental supervision. The GWM&E system is the overarching policy framew ork for monitoring and evaluation in the South African Government. It sketches the policy context for supporting framew orks, such as National Treasurys Framework for Managing Programme Performance information and Statistics South Africas South African Statistics Quality Assurance Framework. It is a statutory requirement that the accounting officer of a department or municipality, or the chief executive officer of a public entity, is required to establish a monitoring and evaluation system for the institution. Primary users of the M&E system w ill use these source systems to refine their planning and implementation processes. The data and information from these source systems w ill also be used by other stakeholders in the GWM&E system to create an overall picture of national, provincial and local performance. These secondary users may use derived IT systems to collate and analyse the data from the underlying organisational source systems. The focus of National Treasurys Framework for Managing Programme Performance information is on information that is collected by government institutions in the course of fulfilling their mandates and implementing the policies of government. These w ould include output and outcome information collected at provincial level for strategic and annual performance plans and budgets, and at local level for Integrated Development Plans and Service Delivery and Budget Implementation plans. Data, inform ation and knowledge sharing forums and mechanisms The IDP Review processes highlighted the lack of baseline data. Where data w ere available, they often were not in the form of user-friendly information. Reporting to national and provincial governments w as often duplicated, and too much effort was spent on reporting rather than analysis. There have been a number of efforts by government to improve the situation, such as the IDP Nerve Centre w hich is an
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information coordination service in support of development planning across the three spheres. Another initiative is the Local Government Data Collection Forum, described in more detail below . Mini case study 18: Local Government Data Forum In 2003, the Budget Forum decided it w as necessary to establish a task team, convened by the National Treasury, to address local government data collection problems. Municipalities w ere being asked for the same information by various national and provincial departments, but all in different formats. This adversely affected data quality and imposed administrative burdens on municipalities. The National Treasury included other stakeholders w ho w ere undertaking their ow n data collection exercises. These included the Department of Provincial and Local Government, Statistics South African, the Financial and Fiscal Commission, the South African Reserve Bank, the Municipal Demarcation Board, the Department of Water Affairs and other research institutions. The Local Government Data Forum identified the users, collectors and providers of data, identified areas of data duplication, recommended w ays of eliminating this duplication and streamlining data collection, utilisation and sharing. GIS and Inform ation Systems Information technology can be an important enabler of effective monitoring and evaluation ( M&E) in a decentralised system.
Mini case study 19: M&E in the Water Sector M&E plays an important role in assessing the achievement of programmes of the provision of basic water services against original policy goals. As the regulator of water supply, DWAF, through the monitoring of drinking w ater quality and other standards, also needs to ensure that municipalities w ho are water servic es authorities adhere to the standards they have set. The same applies in respect of sanitation services. Monitoring of performance of conditional grants (such as the Municipal Infrastructure Grant) is also important. DWAF collects GIS digital spatial data, required for w ater resource management. These include vector as w ell as raster data, digital photography, digital orthophotos and imagery. The Department has a number of in-house information systems. An example is the w eb-based Regulatory Performance Measurement System (RPMS). The RPMS is an open source web-based system w hich has been rolled out nationally and is used by 80% of the w ater service providers. This system provides a consistent format for submissions, easy aggregation as w ell as an early w arning system in respect of non-submission of required plans, reports and other documentation. The Department has formulated a Water Sector Monitoring, Evaluation and Reporting Strategy and Theoretical Framework. This document advocates the triangulation approach w hich makes use of three or more sources or types of information to verify and substantiate the w ater sector research/survey findings (eg on-site spot checks, in-year w ater sector reports, evaluations, quality of life surveys etc). DWAF has also developed an Information Management System for w ater servic es information. It provides a mechanism for DWAF to identify the sources of water services, the process follow ed to obtain the data, the description, format and status of data, w hat is done w ith it after it is received, the products generated w ith
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data, w hich strategic objectives the data satisfy etc. Eventually this w ill lay the basis for increased departmental capacity to generate scenario analysis and creation of know ledge.
8.4 Pressure Points

1. Lack of understanding of the functional scope of provincial oversight: it is readily accepted that provincial governments do not have w ater services or electricity services functions. This is despite the fact that provincial governments have the authority, in terms of Schedule 4B, read with section 155(7) of the Constitution, to oversee municipal performance on these issues. The functional evolution in these sectors has been that provincial governments are not involved in these functions, even though Constitutionally they are permitted to be involved. 2. Provincial support to local government: an identified constraint to effective support is that currently monitoring and oversight functions are fragmented betw een national and provincial departments and, at provincial level, thinly resourced. This impacts on timeous detection of service delivery failures for the purposes of corrective action. 3. Measurement of the conduct of IGR: A formalised programme and capacity is required to measure the effectiveness of implementation and impact on service delivery, of the IGFR Act 4. Fragmented legislation: each piece of legislation relating to a municipal competence contains its ow n monitoring mechanism this causes unnecessary institutional stress on municipalities and may impact negatively on coordination of basic servic e delivery. 5. Reporting requirements to national and provincial governments: this is often duplicated, and too much effort is spent on reporting rather than analysis and coordination of objectives. 6. The Government-w ide Monitoring and Evaluation System : Municipal monitoring needs to extend beyond the monitor ing of inputs to encompass also the benchmar king of local government pr ocesses, service delivery outputs and household and economic development impact. Not enough emphas is is put on the link betw een outputs from various departments and spheres and joint programme and project outcomes.
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9. AREAS FOR IMPROV EMENT At provincial and local level IGR has not yet become institutionalised. This is perhaps not too surprising given that the IG Framew ork Act is only two years old, but as one researcher observed: Of course meetings are held regularly. Provincial officials from both spheres of government have been interacting. There is strong doubt, however, if these meetings and interactions have been regarded differently from the plethora of conferences and w orkshops that these same organs of government organise themselves or participate in. It is not clear w hether the relevant authorities have fully understood that these structures are institutions unto themselves, that have independent existence from the w ishes of stakeholders, and not just a meeting w ith colleagues from another sphere of government. The manner in w hich these meetings w ere held and the topics that they deliberated on cast a doubt w hether the organs involved appreciate the true nature of institutionalised intergovernmental relations Continued implementation support efforts w ill therefore have to be made to ensure that both the letter and the spirit of the IGR Framew ork Act are realised over time. At the same time, the limitations of legislation per se should be recognised. A clear legislative framew ork is a necessary but not sufficient condition for a well functioning IGR system. At the end of the day, the IGR system is inherently political and legislation cannot substitute for political maturity, mutual respect and adequate capacity. The more deep-seated tensions w hich prevail relate to broader, fundamental issues which transcend the domain of IGR proper. As noted in this paper, these relate to questions such as the balance betw een national priorities and provincial autonomy (w hat degree of policy and budgetary autonomy should provincial governments exercise?), and the future of the two-tier local government system (w hich tier should be the primary developmental driver, w hat should be the role of districts, should cities and urban areas be treated differently?). The lack of consensus to date on these basic premises of the IGR system is a cause for concern. The improvement suggested below w ill deal w ith policy issues, but some of the them are about leadership, learning, improving performance and commitment. Often structures and institutions are in place but these are under-utilises for strategic engagement. The system is still evolving and it is difficult at this stage to assess its impact. Irrespective of the IGR system configuration (the distribution of pow ers and functions etc) continuous effort needs to be put into improving leadership and capacity. IGR cross-cuts many different government functions: policy, planning, budgeting, programme implementation and M&E. Often breakdow ns w ithin these functions are confused w ith dysfunctions of the IGR system, w hich may not be the case. The conduct of IGR w ill be measured in the future through the adoption of IGR indicators and guidelines on their collection and interpretation. Distribution of powers and functions across the three spheres Responses to a number of the fundamental issues raised above w ill emerge from the dplg Policy Review process on provincial and local government. The follow ing options are being raised: 1. Clarification of functional competencies in schedules 4 and 5 in order to optimise their distribution across the three spheres. This w ould require
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constitutional amendment so great care has to be exercised to ensure that the revised schedules are robust over time, and not subject to continual adjustment. 2. Finding effective w ays of managing concurrency between National and Provincial government. Even the IGR Fora w ith decision-making pow ers have not managed to effectively manage problems resulting in misalignment betw een national priorities and provincial discretion to budget allocation for nationally set priorities. 3. Pressure and tension from the Tw o-Tier System of Local Government. These pressures are caused by a number of factors e.g. the number of statutory functions that districts actually perform, and the replacement of RSC levies has meant that districts are largely funded from the national fiscus. In many districts there is a mismatch betw een staff, budgets and functions performed. The adjustment of functions betw een locals and districts causes uncertainty and instability. Most important is the need to create certainty on these matters as soon as possible, otherw ise it could under mine intergovernmental planning, budgeting and service delivery implementation processes. Intergovernmental bodies 4. MinMECs and individual MECs have to engage in greater follow-up of their decisions w hich have been approved by extended cabinet and for which funds have been allocated in the division of revenue process to ensure that they are implemented by provincial EXCOs. 5. At both provincial and district level, there should be a clear distinction betw een political and technical support forums. 6. Closer linkages should be encouraged betw een the provincial IG Forums and their district-level counterparts, and greater coordination of policies and projects across local municipalities in the district. 7. Consideration should be given to inclusion of metropolitan municipalities in national IGR bodies. Urban representation could be review ed in the light of the urban development agenda. 8. At provincial and district level, PGDSs, IDPs and LED should be given greater emphasis in the agendas of IGR forums. Intergovernmental planning 9. All spheres should continue to improve quality of in-sphere planning to build a platform for effective intergovernmental planning: PGDS, district and local IDPs, and their alignment w ith each other and to national framew orks.
10. There needs to be a move aw ay from sector by sector regulation of local government, to an approach w hich assesses the cumulative impact of individual sector engagement on local government as a sphere and on individual municipalities. 11. Roles and responsibilities for managing the sectoral interface w ith local government at national and provincial level needs to be clarified e.g. coordinating departments at national level ( Presidency, DPLG, National Treasury) and at provincial level ( Premiers Office, provincial departments of local government and provincial Treasuries).
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Intergovernmental budgeting The intergovernmental budget process may have to be modified to accommodate any of the structural changes to the macro-organisation of the state and take into fiscal account any redefinition and distribution of pow ers and functions as proposed by the Review on Provincial and Local Government. 12. The Public Finance Management Act of 1999 is currently being review ed. It is recommended that the Act and treasury regulations in ter ms of the Act be review ed to ensure that that they facilitate inter-sphere and intersectoral joint work. 13. If there is no change in the distribution of pow ers and functions across the three spheres, then other forms of fiscal restrictions could be considered by national government to force greater alignment of provincial resource allocation w ith national priorities. These could include greater use of conditional grants, binding input nor ms and service delivery output nor ms and possibly more sophisticated forms of grant mechanisms (such as matching grants) to create incentives for co-funding. All of these would mean further curtailment of provincial governments fiscal policy space, which begs the question of w hether there is any economic rationale for the existence of provincial governments at all. This issue is another one w hich w ill be considered in the DPLG-led Policy Process on Provincial and Local Government. 14. There is a need to create certainty in relation to local government fiscal capacity through finalising the impact of the electricity energy restructuring on municipalities and providing local government w ith a suitable ow n revenue substitute for the RSC levy.
Intergovernmental im plementation 15. The use of implementation protocols (as outlined in the IGFR Act) should be promoted, especially in areas like land reform and the environment w here there may not be dedicated IGR Forums. 16. There is also a need to create a common understanding of operational definitions around IGR in integrated service delivery. 17. Overcoming the apartheid spatial planning legacies require spatially targeted state interventions in a differentiated manner across municipalities. 18. Governance should include an IGR dimension. IGR implementation must begin w ith operational mechanisms to achieve the development outcomes envisaged in the IGRF Act. Governance must be informed by the spatial realities/legacies that must be managed in ter ms of planning for development. Monitoring, evaluation, support and intervention 19. Process and outcomes indicators for the monitor ing of the effectiveness of the IGR system should be finalised. These indicators w ill inform the dplgs oversight and support of the IGR system. Capacity w ill be built at provincial level to employ and analyse these indicators. 20. Implementation of the Government- wide Monitoring and Evaluation Policy Framework under the leadership of the Presidency, National Treasury, DPLG, Statistics SA and other relevant departments should be supported.
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21. Reporting and analysis of credible non-financial performance information (such as servic e delivery outputs produced, outcomes and impact) should be enhanced. Non-financial information is crucial for DPLG to measure service delivery and progress in achieving developmental objectives, w hich are the end-points of IGR. 22. The relationship betw een policy, budgets and implementation should be monitored by the relevant national sector department and the National Treasury in order to detect any possible areas of disjuncture as soon as possible. 23. National and provincial governments should continue to build their ow n capacity for monitoring, oversight, support for municipalities and budget for interventions, if necessary. Interventions should not be invoked arbitrarily, but really as a last resort w ith sufficient intergovernmental consultation. The IGRF acts delineates the process and necessary consultation. M&E systems need to assess contributions of individual role-players in joint w ork to promoting accountability for collective outcomes. A clearer understanding of measuring coordination needs to be developed. 24. Local government may be over-regulated. Existing regulations emanating from the national coordinating departments, and sectors should be review ed with a view to streamlining them. Capacity building The issue of capacity to underpin IG forums and processes has been noted several times in the analysis. Efforts in this regard should be intensified in order to fulfil the constitutional obligation in this regard. 25. National departments should accelerate their provincial and municipal service delivery support programmes. Given that capacity is likely to be a long ter m challenge rather than a transient issue, there may be a need for national sector departments to re-assess their role in this regard. 26. Provincial governments should continuously monitor and assess capacity on a number of levels (assignment of functions, financial and service delivery performance) to discharge their legislative duty. 27. The dplg should assist the improved functioning of provincial and local forums through the dissemination of good practice e.g. standing agenda items linked to components of the intergovernmental planning system, IDP- PGDS- NSDP etc. 28. The dplg and provincial Departments of Local Government should build the capacity of local municipalities to participate effectively in District IG forums (inter alia, stressing the importance of properly mandating the representatives, influencing the agenda) and of the distric t municipalities to provide the requisite leadership.
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APPENDIX A
INTERGOVERNMENTAL RELATIONS AND COOPERATIVE GOVERNANCE PERFORMANCE INDICATORS
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KEY PERFORMANCE AREAS FOR IGR AND COOPERATIVE GOVERNANCE
SUPPORTIV E POLICY, L EGISLATIVE AND REGULATORY FRAMEWORKS
INSTIT UTIONAL ARRANGEM ENTS
INT ERGOV ERNMENTAL PLANNING AND BUDGETING
SUPPORT, GUIDANCE AND CAPACITY
COMMUNICATION AND STAKEHOLDER ENGAGEM ENT
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POLICY, L EGISLATIVE AND REGULATORY FRAMEWORKS
A review of intergovernmental relations since 1994 show s the importance of a clear policy, legislative and regulatory framew ork for the achievement of cooperative governance in practice. This framew ork includes the Constitution of the Republic of South Africa as well as the Intergovernmental Relations Framew ork Act.
How has the department/ province/ municipality implemented the Intergovernmental Relations Framew ork Act?
Briefly describe the initial impact of the introduction of this Act Please indicate which of the following areas have been impacted on: Formalisation of IGR structures Introduction of Implementation Protocols Clarity on dispute resolution procedures Increased consultation and information-sharing between the three spheres of government More effective IGR meetings
Has the department/ province/ municipality concluded any Implementation Protocols w ith another sphere of government since the introduction of the IGRF Act? If yes, please provide the following details: Parties to the protocol Focus of the protocol Whether or not the Implementation Protocol guidelines were helpful Monitoring arrangements
Has the department/ province/ municipality declared any formal intergov ernmental disputes with another sphere of government since the introduction of the IGRF Act? If yes, please provide the following details: Parties to the dispute Issues in dispute How the dispute is being/ was resolved
Please prov ide information on the assignment or delegation of pow ers and functions to another sphere of gov ernment by your department or prov ince. Kindly include the follow ing details:
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Use of the dplgs assignment guidelines Monitoring of the assigned/ delegated functions
Please prov ide information on the assignment or delegation of pow ers and functions to your prov ince or municipality by another sphere of gov ernment. Kindly include the follow ing details: Use of the dplgs assignment guidelines Monitoring of the assigned/ delegated functions
In practicing good intergovernmental relations and w orking towards integrated service delivery has the department/ prov ince/ municipality experienced any policy, legislativ e or regulatory obstacles? If yes, please provide an example as well as possible solutions to overcome these obstacles
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INSTIT UTIONAL ARRANGEM ENTS
Institutional arrangements are a key ingredient in the day-to-day conduct of intergovernmental relations. The effective functioning of these institutional arrangements is essential. Institutional arrangements for IGR include organisational structures, IGR forums, regional offices,
Please prov ide information on the participation of your department/ prov ince/ municipality in MinMecs and other sector-based IGR Forums. Please include information on the following: Number of MinMecs/ sector-based IGR Forums Frequency of the meetings
Please prov ide information on the participation of your department/ prov ince/ municipality in Premiers Coordinating Forums and District Intergov ernmental Forums. Please include information on the following: Number of forums Frequency of meetings
Please prov ide information on the participation of your department/ prov ince. Municipality in Technical IGR Forums. Please include information on the following: Number of forums Focus of the forums Frequency of the meetings
Please comment on the follow ing aspects of the IGR Forums: Strategic focus of the agendas Attendance of meetings by mandated representatives
Please comment on the v alue of IGR meetings in respect of the follow ing: Relationship building across the spheres of government Information sharing across the spheres of government Aligning planning Coordinating delivery Joint decision making
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Cascading decisions to other spheres Problem-solving Resolving intergovernmental disputes
Please prov ide information on how your department/ prov ince/ municipality manages IGR. Please provide details on the following: Number of staff members dedicated to IGR Organisational location of the IGR Unit IGR business plan or work programme Monitoring of IGR activities
Please comment on the linkages betw een different IGR Forums. Please include any suggestions on how the linkages between different IGR Forums can be strengthened.
Please comment on the ideal roles and responsibilities of the follow ing structures for IGR: DPLG Sector departments with concurrent powers and functions Sector departments without concurrent powers and functions Offices of Premiers Provincial Departments of Local Government District Municipalities Salga
Please prov ide information on any prov incial, regional or district offices of your department and how these offices participate in local IGR forums and planning processes
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INT ERGOV ERNMENTAL PLANNING AND BUDGETING
Intergovernmental planning and budgeting sits at the heart of integrated delivery and the achievement of shared developmental outcomes. Much has to be achieved in promoting greater coordination, integration and alignment of plans and budgets w ithin and between the three spheres of government.
Please comment on the state of sector-w ide planning in your sector. Please refer to the follow ing: Status of a sector-wide plan/ Sector Master Plan Use of IGR Forums for sector-wide planning Participation in the planning processes of other spheres of government Information about relevant plans in other spheres of government Use of the National Spatial Development Perspective in sector planning
Integrated development planning is designed to produce a plan that integrates the plans and proj ects of all gov ernment departments and agencies w ithin a specific geographic space. Please comment on the following: Involvement of national sector departments in IDP processe s Involvement of provincial sector departments in IDP processe s Involvement of parastatals and agencies in IDP processes
Intergov ernmental implementation is required to ensure seamless deliv ery of services to communities and residents w ithin a specific geographic space. Please comment on the following: Implementation Protocols Shared Understandings
Use of IGR Forums for intergovernmental planning and budgeting:
Please prov ide information on the reporting that your department/ prov ince/ municipality requires from another sphere of gov ernment. Please comment on:
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What is the frequency of the reporting Is a standardised template provided How are the reports used by the department/ province/ municipality Does this reporting requirement arise from any legislation, regulation, or agreement Submission of the reports Quality of the reports
Please provide information on the reporting that your department/ province/ municipality must provide to another sphere of government. Please comment on: What is the frequency of the reporting Is a standardised template provided How are the reports used by the department/ province/ municipality Does this reporting requirement arise from any legislation, regulation, or agreement Submission of the reports Quality of the reports
Please prov ide information about the disbursement of funds to another sphere of government. Please include details on: Purpose/use of the funding If the funding is conditional Monitoring
Is this discussed in any IGR Forums? Please provide details.
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SUPPORT, GUIDANCE AND CAPACITY
Please comment on the comment on the capacity required in your department/ province/ municipality to effectively manage IGR (including number of staff members, financial resources, time)
Please comment on the core competencies needed for managing IGR. Please indicate which of the following are important competencies for all managers involved in IGR: Understanding of IGR legislation Meeting management Coordination capabilities Interpersonal skills Knowledge management Using ICT Stakeholder analysis Strategic management Experience in managing IGR
Please indicate w hat kind of support, guidance or capacity-building is needed for effectiv e IGR. Who do you believ e should be responsible for prov iding this? Would a formal IGR qualification be valuable?
Please prov ide information on any support, guidance or capacity-building that your department/ province/ municipality prov ides to another other sphere of government.
Should know ledge of the theory and practice of IGR be a core competency of all senior managers in the public service?
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COMMUNICATION AND STAKEHOLDER ENGAGEM ENT
Please comment on the communication of decisions and outcomes of IGR Forums w ithin your department/ prov ince/ municipality
Kindly indicate w hich of the information channels are mainly utilised for intergov ernmental communication and information-sharing IGR Forums GCIS and Government Communicators Forums Informal channels Media Government websites Official correspondence Other
Does the department/ province/ municipality have a Database or Knowledge Centre that includes information on any of the follow ing: Contact details of officials in other spheres of government Agendas, minutes and reports from IGR meetings Statistics for use in intergovernmental planning Planning documents
Please comment on w hether or not a w eb-based IGR Information Portal w ould be of use to your department/ province/ municipality
Are j oint, intergovernmental communications or marketing campaigns conducted in your sector/ province/ municipality? Please provide details.
Please prov ide information on how your department/ prov ince/ municipality manages its stakeholder engagement activ ities. Kindly include information on engagement mechanisms, focus of engagements, and priority stakeholders.
Please comment on the extent to w hich a culture of cooperative governance is prev alent w ithin government? Please comment on ways in w hich a culture of cooperative can be further strengthened.
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APPENDIX B BIBLIOGRAPHY AND REFERENCES Baatjies, R and Steytler, N (2006) District Intergovernmental Forums: A preliminary assessment of institutional compliance with the Intergovernmental Relations Framework Act, Local Government Project, Community Law Centre, University of the Western Cape, November 2006 Brits, A (2006) Tracking Planning and Implementation Interventions across Regions and Institutional Boundaries: Failure to Establish a Uniform Reporting Language across Government, Council for Scientific and Industrial Research (CSIR), http://researchspace.csir.co.za/dspace/handle/10204/868 Department of Land Affairs (2007) Settlement and Implementation Support (SIS) Strategy for Land and Agrarian Reform in South Africa, Commission on Restitution of Land Rights , Pretoria, http://land.pw v.gov.za/Documents&Publications/Publications/SIS%20Strategy /1/content.pdf DPLG and UWC School of Government (1999) The Intergovernmental Relations Audit: Towards a Culture of Cooperative Government, Final report, Department of Provincial and Local Government, Pretoria DPLG (2003) Guideline Document on Provincial-Local Intergovernmental Relations, Department of Provincial and Local Government DPLG (2005) Intervening in Municipalities: Summary of Audit Report on the Application of Section 139 of the Constitution since 1998 DPLG (2006) Intergovernmental Dispute Prevention and Settlement Practice Guide, Notice 1770 of 2006, Government Gazette, 27 November 2006 DPLG (2007a) Practitioners Guide to the Intergovernmental Relations System in South Africa, Intergovernmental Relations Toolkit, Department of Provincial and Local Government DPLG (2007b) Implementation Protocol Guidelines, Intergovernmental Relations Toolkit, Department of Provincial and Local Government DPLG (2007c) Intervening In Provinces And Municipalities: Guidelines For The Application Of Sections 100 And 139 Of The Constitution, , Intergovernmental Relations Toolkit, Department of Provincial and Local Government Community Law Centre (2007a) Single-Tier Local Government For Major Urban Areas, Local Government Project, Community Law Centre, University of the Western Cape, June 2007 Community Law Centre (2007b) Redefining The Role And Application Of District Municipalities, Local Government Project, Community Law Centre, University of the Western Cape, June 2007 Community Law Centre (2007c) Developmental Local Government: Determining
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Appropriate Functions And Powers, Local Government Project, Community Law Centre, University of the Western Cape, June 2007
G&A Cluster Task Team (2005) Framework for Managing Joint Programmes, report of the Governance and Administration Task Team, http://www.dpsa.gov.za/documents/mos/framew ork_24_03_2006.pdf Fessha, Y and Steytler, N (2006) Provincial intergovernmental forums: A post Intergovernmental Relations Framework Act compliance assessment, Local Government Project, Community Law Centre, University of the Western Cape, November 2006 Gauteng Provincial Government (2004) Gauteng Provincial Government Provincial Municipal Development Planning Engagement Process, Joint initiative betw een the Department of Local Government ( MIDP Unit) and the Department of Finance and Economic Affairs, November 2004. Girishankar, N, Degroot, D and Pillay, T.V. (2006) Measuring Intergovernmental Fiscal Performance in South Africa: Issues in Municipal Grant Monitoring, Africa Region Working Paper Series No. 98, World Bank, Levy , N and Tapscott, C (2001) Intergovernmental Relations in South African: The Challenges of Cooperative Government, UWC School of Government and IDASA Political Information and Monitoring Service, Cape Tow n Manche, J (2004) Ensuring the Effective Participation of Each Sphere of Government in the Processes snd Structures that Determine Intergovernmental Fiscal Arrangements, Paper presented at the Financial and Fiscal Commissions Tenth Anniversary Conference, Cape Tow n Makw etla, TSP (2004) Remarks by Premier TSP Makw etla at the FOSAD Workshop, Centurion Lane Hotel, 2 December 2004, http://www.mpumalanga.gov.za/Premier%20Office/Spechess/Speeches004/2 Decce004.htm Mettler, J (2000) Provincial-Municipal Relations: A Few Challenges, Local Government Working Paper, Community Law Centre, University of the Western Cape, http://www.communitylawcentre.org.za/localgovernment/w orking-papers03/w p003-2000-mettler-provincial-municipalrelations-a-few-challenges.pdf/ Municipal Demarcation Board 2001 Division of Powers and Functions: Discussion Document Municipal Demarcation Board 2003 Local Government Powers and Functions: Definitions, Norms and Standards Municipal Demarcation Board, 2005, Review of the Adjustment of District Functions to Local Municipalities, May 2005 Municipal Demarcation Board (2007) National report on local government capacity: District and local municipalities, MDB capacity assessment period 2006/2007 Murray, C (2001) The Constitutional Context of Intergovernmental Relations in South
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Africa, In Levy , N and Tapscott, C, Eds (2001) Intergovernmental Relations in South African: The Challenges of Cooperative Government, UWC School of Government and IDASA Political Information and Monitoring Service, Cape Tow n National Treasury (2007) Provincial Budgets and Expenditure Review: 2003/04 2009/10:3, http://www.treasury.gov.za National Treasury (2008a) Budget Review 2008, http://www.treasury.gov.za National Treasury (2008b) Estimates http://www.treasury.gov.za of National Expenditure 2008,
Palmer Development Group (2007) District IGR Forum and Shared Services Review, Commissioned by the Department of Provincial and Local Government, July 2007 Portfolio Committee on Provincial and Local Government (2003) Report on the Study Tour of Municipalities, National Assembly, 27 May 2003 Presidency (2004) The National Spatial Development Perspective, Provincial Growth and Development Strategies and Municipal Integrated Development Plans, Policy Coordination and Advisory Services Unit, 10 December 2004 Presidency and DPLG (2005) Provincial Growth and Development Strategy Guidelines Presidential Review Commission (1998) Developing A Culture Of Good Governance, Report Of The Presidential Review Commission On The Reform And Transformation Of The Public Service In South Africa, Presented to the President of South Africa, Mr NR Mandela, 27 February 1998, http://www.info.gov.za/otherdocs/1998/prc98/index.html Rao, M. G & Khumalo, B (2005) Sharing the Cake: A Review of Provincial Equitable Share Formula in South Africa, 3, accessed at http://www.ffc.co.za/conf/papers/cakesharing.pdf on 11 October 2007 Selemo Strategic (2007a) Preparations for the FIFA 2010 World Cup: A Case Study in Intergovernmental Cooperation, Department of Provincial and Local Government Selemo Strategic (2007b) Improving Service Delivery in the Former Cross-Boundary Municipalities: An Intergovernmental Relations Perspective, Department of Provincial and Local Government South African Cities Netw ork (2007) SA Cities Netw ork, 2007: State of City Finance Report 2007). Shilow a, S (2004) Improving Intergovernmental Relations: A Critique of the Macro-Organisation of the State and Possible Solutions, S D R Vo l 3 N o 3 Steytler, N (2001) The Settlement of Intergovernmental Disputes. In Levy ,N and Tapscott, C ( Eds) Intergovernmental Relations in South African: The Challenges of Cooperative Government, UWC School of Government and
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IDASA Political Information and Monitoring Service, Cape Tow n Steytler, N, Fessha, Y and Kirkby, C (2006) Status quo report on intergovernmental relations regarding local government, Local Government Project Community Law Centre, University of the Western Cape Sustainable Development Consortium (2007), Settlement and Implementation Support (SIS) Strategy for Land and Agrarian Reform in South Africa, 2 November 2007, http://land.pw v.gov.za/Documents&Publications/Publications/SIS%20Strategy /index.html Tw eedie, S (2003) Intergovernmental Relations: A Key to Good Ser vice Delivery A Guide for Elected Members and Officials, Australia South Africa Local Government Partnership, http://devplan.kzntl.gov.za/ASALGP/Resources/Documents/ASALGPproducts /IntergovernmentalRelations/index.htm Visser, J, Steytler, N and Mettler, J (2000) Manual for the application of section 139 of the Constitution, Department of Provincial and Local Government Van Ryneveld, P (2007) Co-operative Governance and Inter-governmental Relations, Paper commissioned by the Department of Provincial and Local Government as part of the Policy Process on the Review of Provincial and Local Government.
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15 YEAR REVIEW REPORT ON THE STATE OF INTERGOVERNMENTAL RELATIONS IN SOUTH AFRICA

The dplg: 13 March 2008

Report on the State of Intergovernmental Relations in SA

Report on the State of Intergovernmental Relations in SA

Report on the State of Intergovernmental Relations in SA

Report on the State of Intergovernmental Relations in SA

IGR REPORT ON THE STATE OF INTERGOVERNMENTAL RELATIONS IN SOUTH AFRICA 1. INTRODUCTION

Report on the State of Intergovernmental Relations in SA

Report on the State of Intergovernmental Relations in SA

2. THE EVOLUTION OF THE IGR SYSTEM

Report on the State of Intergovernmental Relations in SA

Report on the State of Intergovernmental Relations in SA

Report on the State of Intergovernmental Relations in SA

Report on the State of Intergovernmental Relations in SA

Report on the State of Intergovernmental Relations in SA

Report on the State of Intergovernmental Relations in SA

3.2 IGR Processes: Policy and Planning

Report on the State of Intergovernmental Relations in SA

Framew ork IGR

Framew ork IGR

Report on the State of Intergovernmental Relations in SA

IGR SYST EM COMPONENT

NATIONAL Act of 2005

PROVINCIAL Act of 2005

Cabinet Cluster PCC FOSAD NCOP

Conflict resolution and disputes

3.3 Lessons from Practice

Some municipalities faced considerable capacity challenges initially in formulating

Report on the State of Intergovernmental Relations in SA

Report on the State of Intergovernmental Relations in SA

3.4 Pressure Points

4. INT ERGOV ERNMENTAL INST RUMENTS: FORUMS AND BODIES

Report on the State of Intergovernmental Relations in SA

4.1 Legislation and Context

Report on the State of Intergovernmental Relations in SA

4.2 Intergovernmental Forums and Bodies: Processes

Report on the State of Intergovernmental Relations in SA

Report on the State of Intergovernmental Relations in SA

Report on the State of Intergovernmental Relations in SA

Report on the State of Intergovernmental Relations in SA

Report on the State of Intergovernmental Relations in SA

4.4 Pressure Points: IGR Forums and bodies

Report on the State of Intergovernmental Relations in SA

Report on the State of Intergovernmental Relations in SA

Report on the State of Intergovernmental Relations in SA

5.2 IGR Processes: budgeting and financial management

Report on the State of Intergovernmental Relations in SA

Report on the State of Intergovernmental Relations in SA

IGR Forums/Bodies IGR Processes IGR instruments

Conflict resolution and disputes

Report on the State of Intergovernmental Relations in SA

Report on the State of Intergovernmental Relations in SA

Report on the State of Intergovernmental Relations in SA

Report on the State of Intergovernmental Relations in SA

Report on the State of Intergovernmental Relations in SA

Report on the State of Intergovernmental Relations in SA

predictability and transparency:

Report on the State of Intergovernmental Relations in SA

Report on the State of Intergovernmental Relations in SA

Report on the State of Intergovernmental Relations in SA

Report on the State of Intergovernmental Relations in SA

5.4 Pressure Points Intergovernmental Budgeting